In the world of business, any aspect that separates your company from the crowd can be a valuable competitive advantage. This becomes particularly valuable in fiercely contested industries, such as technology and finance, where even the smallest detail can be the line between success and failure.
However, can outsourcing provide a large enough competitive advantage to truly matter? Join us in this article as we take a look!
Outsourcing as a Competitive Advantage
In a nutshell, yes, outsourcing can certainly be a competitive advantage for a business of any size, if done correctly. However, it’s not usually about the outsourcing itself, but the direct and indirect benefits that it provides.
These advantages can help to reduce costs, increase efficiency, and enhance flexibility, all of which can make your product or service more appealing to customers.
Direct Competitive Advantages
Some of the direct competitive advantages that your company can receive through outsourcing include:
- Expert Assistance – When you outsource operations, you can immediately get the opinion of experts, allowing you to innovate in ways that your competition has never thought of.
- Reduce Costs – With lower wages, fewer overheads and improved processes, you can offer the same product or service as your competitors but at a cheaper price point, or a greater profit margin.
- Reach New Markets – If you work with experienced outsourced staff, they can use their knowledge and resources to help you expand your business into new markets.
- More Time – You can also free up some of your time by delegating tasks to workers. These could be highly skilled tasks that require intense thinking, or monotonous tasks that do not except for wasting valuable time.
Indirect Competitive Advantages
There are two main indirect advantages that come with outsourcing that can help your business get ahead of the competition. First up is less risk, which is a byproduct of fees being reduced. For example, you don’t need to invest in infrastructure and specialist equipment for all employees, meaning that you’re risking a lot less capital when it comes to daily operations.
Scalability is the second competitive advantage, which is a result of all the aforementioned direct benefits. With more time, lower costs, and the ability to reach new markets, you can scale your business at a much faster rate than your competitors.
Other Things to Consider
While outsourcing can be a fantastic way to grow your business and get ahead of the competition, it can come with some disadvantages:
- Quality – If you don’t keep a close eye on product creation or delivery of a service, quality might slip as a result, especially if done on a mass scale.
- Management – It can be hard to track the progress and manage remote workers who are located in other countries. Apps such as Slack can help, but it’s not quite as effective as overseeing work in person.
- Communication – Time zones and language barriers can also cause issues with communication if your employees are located abroad.
The best way to avoid these is by using a reputable and trusted company, such as BOST, to find staff that seamlessly match your company’s ethos. You can also explore nearshoring options to drastically reduce the issues with communication, as this practice will guarantee that your remote staff are in the same or a similar time zone to you.
Conclusion
In summary, while outsourcing can be a competitive advantage on its own, the focus should be on the associated benefits of hiring remote workers. These benefits include reducing costs, reaching new markets, and receiving expert advice, which is where the real competitive advantage lies.
Of course, we have to also mention that nearshoring can help to eliminate various disadvantages that are often associated with remote workers. For example, nearshoring can help to overcome the language barrier and allow you to communicate with staff who use the same time zone.