What are the different types of outsourcing?

What are the different types of outsourcing?

Did you know that, on average, manufacturers outsource up to 80% of their products? Outsourcing has been part of businesses’ strategic plans for over 40 years – in fact, outsourcing was already in use in the 70s when companies started to look at external providers for completing processes that were not planned to be processed in-house.

Today, thanks to technological advancements, outsourcing is viable in various areas of expertise, and often, it is a perfect solution for businesses, such as start-ups, who simply do not have all the expertise that they need at hand to complete certain company tasks.

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Many businesses also rely on outsourcing as a cost-saving solution to cut unnecessary expenses and to ensure that employees can focus on their jobs, without the stress of needing to complete tasks that they are not equipped for.

Outsourcing can provide more effective timeframes for companies too and help them to be quicker to market with products. Industrial design is a good example of this, as companies who need product designs and rapid prototyping done regularly reach out to external industrial designers for these tasks. As industrial design is a specialised area of expertise, a business might not per se have design staff in-house, but they can draw on experts in their network to complete certain jobs.

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So, how do we classify these different types of outsourcing? And do they only relate to manufacturing and design?

Not quite.

In today’s blog, we will be looking at what the different types of outsourcing are, and how they can benefit companies who consider these services to enhance their business offerings. Let start with the first category: professional outsourcing.

Professional outsourcing

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There are several professional services that companies do not necessarily need to have in-house. These types of outsourcing include business areas such as accounting and bookkeeping, public relations, marketing or even legal services.

Certainly one of the biggest benefits that you as a business can get from professional outsourcing is the savings factor when you consider that you will not need to set up tax and benefits, but would rather look at hourly fees or retainers, which, in turn, can reduce your overhead costs too. You will furthermore not need to take time off to train staff, as your external provider will already have all the knowledge needed to perform the jobs that you have hired them to do.

When you use professional outsourcing, there is a bit of flexibility too, as you will determine the hours that your contractors will work for you. This means that by being upfront by the scope of work, you will be able to better stick to your budget and not be liable for unforeseen costs.

IT outsourcing

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When you simply do not have the funds to have a fully-fledged IT department for your business, an outsourced team can provide the relief and support that you need. Thanks to technology and chat platforms such as Slack or even Microsoft Teams, you can always stay connected, and have your data properly managed.

It is definitely a cheaper solution than hiring several IT members in-house, and with an outsourced partner, you can ensure that you have access to the best possible IT solutions as well.

Manufacturing outsourcing

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For small and upcoming businesses, as well as big-league players, manufacturing outsourcing can help to get products to market without needing to bring in costly equipment or supplies that can drive up their overhead costs.

Quality can be a big concern when looking at this business solution option, as often you might not be in proximity of your provider. This is why it is best to only select a trusted and established provider. If you are teaming up with an external industrial design team, you can also ask them for their advice on outsourcing partners that will best suit your planned products’ manufacturing.

Process outsourcing for specific tasks

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Sometimes, there are specific processes that companies are looking for when it comes to outsourcing. These could include courier services, human resources or even ad campaigns. Often, these process-specific types of outsourcing are incredible tools to enhance customer support. As an example, courier services can improve how consumers experience the delivery of their goods from a specific business and help to create more loyalty thanks to an enjoyable experience provided.

Project outsourcing

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Some business projects, such as developing a new app or building or revamping a website, have shorter timeframes than other internal processes and can easily be performed externally through an outsourced partner.

Project outsourcing is a valuable type of outsourcing when you have a project-based task at hand that you do not want to hire in-house team members for, but would rather draw on external resources to get the job done. When you are looking for a part-time solution for a project, this is a good route to follow.

Final thoughts

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The types of outsourcing that you require will fully depend on your business goals and needs; however, you might find that there are various areas where you can get more cost-effective support and better access to leading talent in certain focus areas. You can also opt for outsourcing in-land or offshore, which truly expands your choices of finding the best talent for the tasks that you need to get done.

So, consider outsourcing when next you plan your budgets, and see how trusted providers could possibly assist your business processes. You might just be surprised how outsourcing can make a difference for your business!

If you are a potential client and you are ready to experience an exceptional journey of design for your next project with amazing results, contact us today. We would love to hear from you and to provide the personal touch that we have become known and respected for as one of Melbourne’s leading industrial design teams!