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Different Outsourcing Strategies

Outsourcing is something more and more business owners are making the most of today. This is a practice whereby you employ the services of another company to take care of a specific operation at your business.

Outsourcing saves businesses money and time. It is not beneficial for all tasks but it can be for many, especially those whereby you have a lack of expertise at your company.

If you are going to look for a company to outsource some work to, you need to go in with a plan. With that being said, read on to discover more about the different types of outsourcing relationships you can have.

So, let’s take a look at five different options…

Handing over full responsibility

This is simple: you look for a firm to take complete control of a specific task and you pay them for it. Look at this contaminated land management service to get a better understanding. It is a full, all-inclusive offering, designed to take the entire weight off your shoulders.

Supplier revenue based on your own performance

This approach is rather unique but straightforward. It means that you and the firm you hire share the benefits as well as the risk. You are going to be paying them based on the benefits they provide. This mean an important point is negotiating what is expected from the offset. This can be difficult, as both parties want some protection.

Offshore outsourcing

A lot of companies today have also decided to outsource some of their business tasks to companies that are based in other countries. The main reason for this tends to be because they can lock in cheaper rates. However, this is not always the case. It could be for better labour. Either way, communication is critical here.

Selective outsourcing in a flexible or module manner

With this strategy, the task in question or the part of your business you want to outsource will not be fully outsourced. You will keep some elements in-house, and you will then outsource anything from around 20 to 60 per cent of your budget, let’s say your marketing budget for example. This is a flexible solution, meaning you can play towards your team’s capabilities.

Using numerous suppliers for an activity

Finally, this strategy involves working with at least two suppliers, rather than aligning with one. This reduces risks and it also helps to increase quality too. Equally, though, it can create more frustration and difficulty managing relationships. You need to think carefully about the person at your business who is going to be managing all of this.

Hopefully, you now have a better understanding of the different options that are available to you. There is no right or wrong approach – it is all about figuring out what is right for your business.