One of the trends that are currently dominating Australian startup and SMB landscape is the task of outsourcing or even offshoring some of their services to companies from distant regions. The thing is that in order to start your own IT or HR department, you need to heavily invest and increase your hiring efforts, which is both costly and complicated. Same goes for fields like customer services or digital marketing, which, on their own, require a level of skill and expertise. These are just the top of the iceberg why so many Australian companies decide to outsource. Here are some additional reasons.
1. It is cost-effective
The first major reason why so many Australian companies outsource is because it’s very cost-effective. In other words, at one point in their existence, they’ve made a list of expenses that would come from starting their own in-house department and found the cost of such a project simply terrifying. Hiring people, equipping them with the latest hardware and software, as well as continuous training takes an incredible amount of time. In other words, it is simply cheaper to find an agency you can outsource this task to and get a fixed price for these services.
2. It’s more scalable
Another advantage of outsourcing lies in the fact that it’s far more scalable than starting your own in-house team. Most agencies you will collaborate with will see you as one of their many clients. In other words, their capacities by far exceed your needs and if you require a broader spectrum of services, all you need to do is ask (and of course pay) for it. With your own department, you have to bring in more people, allocate another room or lease a bigger space for the team, as well as get more equipment. To make the long-story-short, it is simply more scalable to outsource and simply change your contract over the course of years.
3. An experienced team
The issue of experience is a double-edged sword, seeing as how you won’t have an experienced team on your side unless you start on time. Still, until you get there, you might go through a whole world of trouble. During these initial weeks, months and even years, you will consciously agree to have a less efficient team than you would have than if you decided to outsource. Sure, you would be doing all of this with a long-term gain in mind, however, the loss of clients, workload and overall productivity that you would suffer in this period is hard to quantify and accurately measure. With outsourcing, on the other hand, you can immediately start working with niche veterans.
4. You can avoid unnecessary diversification of operations
The next advantage you gain by outsourcing is that you can avoid unnecessary diversification of operations. Most people start a business in an industry they were previously employed in. This means that they already have enough experience to oversee most of the operations of their new business. For instance, if you were a salesperson in your previous company, you can oversee your sales team with optimal efficiency. On the other hand, when you need to start importing goods to Australia from abroad, this might be a bit out of your league. Therefore, it might be for the best to contact someone who specializes in these services.
5. Greater talent pool
The next massive advantage of outsourcing to other regions of the world lies in a much greater talent pool you can exploit. Just a couple of decades ago, this kind of business model would be completely impossible, yet, nowadays, you can easily collaborate with a company that is more than half a world away. Apart from giving you more leverage while negotiating, this also helps you look through different offers with ease in order to find exactly what you’re looking for.
6. Accessing new market areas
Another massive boon of outsourcing outside of Australia is the access that you can get to new markets. Sure, in the era of the internet, global services and platforms it is much easier to penetrate a foreign market, however, it is even better if you have a local company as a partner. In this way, you can take advantage of their network of contacts and lay out a better foundation for your future presence in that region. Nevertheless, this plan is somewhat out of scope for most of the younger enterprises.
7. Easier employee management
Finally, outsourcing greatly helps when it comes to the issue of employee management, as well. Companies you outsource to are expected to handle their employees on their own. Sick leaves they take, bonuses they earn and any extra hours they invest in your project are no longer a concern of your own. All you have to worry about is communication with your liaison at the agency you’re working with and making sure you settle your financial obligations towards them in time.
As for those who dispute this method by claiming that outsourcing is only good as a short-term solution, tend to forget that even conglomerates like Apple outsource their production to countries like China, for the sake of cost-efficiency. With that in mind, what is there to stop an ambitious Australian enterprise from doing the same?