What is outsourcing

“Outsourcing” or “to outsource” means to transfer the work you have previously done in your company to external actors so that they take over the relevant tasks.

The opposite of outsourcing is insourcing, which means that a company takes over tasks they have previously purchased from other suppliers.

The relationship between the external actor and the company is regulated by a contract, which is determined between the parties. It contains tasks, payment information, and is often time-limited.

Companies that use outsourcing see that time, expertise, or work capacity is not sufficient and need to reorganize the distribution of tasks. This usually involves tasks that are important for operations but are not core business.

Why outsource work?

Companies that choose to “outsource” tasks may have experienced growth in their company and want to focus on other tasks than those they choose to outsource to external actors. Usually, it is not the company’s main activity that is outsourced. It is often smaller tasks that can be done cheaper, faster, and better by an external party.

There are many tasks in a business that may not have time for or are not within the company’s field of expertise. Those tasks are common to outsource. Examples include accounting, payroll, cleaning, and maintenance of IT services.

Who should you outsource to?

First and foremost, when choosing a supplier to outsource from, it is important that they offer to do the service better or cheaper than your company can do on its own. In addition, factors such as geography, flexibility, price, and communication are important to consider. The tasks to be outsourced are also crucial for the qualifications you require from the external supplier.