Why Global Outsourcing is Helping Businesses to Expand?

As business becomes increasingly global and companies of all shapes and sizes are competing for customers across the globe, there’s a growing pressure to expand into new countries and territories. For mid-market organisations, this technique can be expensive, but for small businesses and startups, it can be out of reach. One way in which you can expand without the expense, however, is by investing in global outsourcing. In an interview with Craig Dempsey, the founder and CEO of Biz Latin Hub, we explore how global outsourcing is changing the business world, and how companies like yours can benefit from it.

Why is global outsourcing important?

There are so many benefits to global outsourcing, but perhaps the most obvious is that it helps companies find partners and networks in other parts of the world and take advantage of their skill set and location. Say you run a support business in the United States but want to offer your services to businesses in Mexico — by outsourcing some of your work, you can!

One of the biggest reasons why businesses are using global outsourcing is that they can maintain and protect their brand, whilst offering their services in new territories. Indeed, rather than saying “Sorry, but I don’t think we’d be able to help you,” you can say “give me a week, and we’ll find a solution that suits you needs”. It’s a win-win situation and allows you to get ahead of your competitors — no longer do you have to turn down work or even recommend another company’s services — you can become a worldwide brand overnight.

Talk to us about global outsourcing for startups…

When you’re in the early stages of a business venture and you’re learning how to form a new company, there are so many things you need to take into consideration. As well as paying for the company formation, opening an office and building a team of staff, you must also think about the ways in which you’re going to promote your business and put your name out there. And for startup businesses with a global mission statement, being able to offer your services in countries around the world from day one is nigh on impossible — at least, it would be without utilising global outsourcing. Including this technique allows you to grow pretty fast.

In the Latin American market, where my business primarily operates, I’ve seen first-hand plenty of startup businesses go on to achieve huge success, and many of those have grown thanks to the help of other organisations. The truth is, in business, you need to form strategic partnerships and bring in the very best talent, both by hiring as and when appropriate, and outsourcing those tasks and responsibilities that you cannot afford to fulfil on your own.

Put it this way — if you run an e-commerce store, it’s cheaper to pay another company to distribute your goods than open your own distribution warehouse, at least in the short-term, as the initial investment and ongoing operating costs of such a venture are simply too high. With global outsourcing, on the other hand, your business can appear as though it has a global presence with distribution centres in all four corners of the world, even if it does not.

What about growing a business through outsourcing?

In short, that’s what global outsourcing is all about. Building market share in your country and in territories around the world can take time and be very expensive. Aside from the marketing costs, you have to worry about forming companies, recruiting staff, and thinking about the human resources aspect of expanding a business. Global outsourcing helps you to grow your presence and share. In a time when we’re seeing rapidly-changing industries and ‘untouchable’ businesses being swallowed up by rivals or going into administration, you cannot afford to sit still — outsourcing allows you to penetrate new markets and get ahead before your competitors stand a chance, which will unlock new revenue streams and cement your position within a new territory. Whether you’re looking to expand into Latin America or Asia, there are endless possibilities, but being the first to get there will serve you well.

Can skill shortages be met by global outsourcing?

Absolutely! With the United Kingdom set to leave the European Union in 2019 and tighten its borders, we’ll no doubt see an increase in skill shortages within the territory — and there are similar skill shortages in the United States, too, with businesses struggling to find top talent to cover vacancies in computer analysis, web development, management, engineering, accounting, auditing, training, administration, mechanical engineering, and more. Of course, most businesses attract better candidates by increasing their compensation package or by training new recruits to meet their criterion, but it’s not always possible to find what you need.

Global outsourcing reminds businesses that there’s a whole world out there — and millions of exceptionally skilled workers who can change the fortunes of your business. I’ve seen first hand how outsourcing has helped organisations deliver better quality products, improve their customer service, and increase their bottom line, but it takes a strategic approach. I always recommend consulting with several companies before outsourcing, and understanding that not everything about global outsourcing is positive. Managing risk is critical…

What are the risks associated with global outsourcing?

Whether you’re working with a Professional Employer Organization or you’re outsourcing your entire manufacturing line, it’s important that you know what can go wrong. Perhaps the most obvious downside to outsourcing is that you’re no longer in total control of the product or service your business creates, so investing in quality control is critical. It’s also important that you work to minimise mistakes and be aware of the fact that a supplier or PEO can ‘pull the plug’ whenever they want and discontinue their services, so having a contract in place or a backup plan should everything go wrong is critical. Don’t assume you’ll be able to tick along at the same pace forever; your own business needs and the needs of the PEO or outsourcing company may change, and those new requirements may not be compatible.

What would you say to businesses looking to outsource?

Get started! Whilst there are a couple of risks associated with outsourcing, it’s a relatively safe technique and allows you to grow at a much faster rate. Whether you’ve been in business for decades or you’re only just starting out, outsourcing is the key to finding worldwide success and allowing your business to get ahead of the competition. Good luck!