Outsourcing gets a bad rap. In every economic downturn since about World War II, politicians and pundits alike have framed attempts to move internal jobs to external workers as evil, corporate callousness. They have made concerns about outsourcing an emotional talking point in any discussion about economic turmoil at home and abroad.
In recent times, these same commentators have moved to conflating the terms outsourcing—the act of sending work outside corporate walls—and offshoring—the act of sending work outside political borders. These two words, outsourcing and offshoring, are often used interchangeably in the heat of debate, despite the fact that outsourcing itself doesn’t have to cross borders at all.
Outsourcing is simply another word for specialization
Outsourcing can refer to moving any business process from in-house to a third-party vendor. That could mean everything from hiring an accountant to file your company’s taxes to airlines hiring top chefs to cater their in-flight meals. Indeed, specialization and sub-specialization in all fields—from Salesforce help and training consultants to marine biologists—is a hallmark of our 21st century economy. If we were still wholly self-sufficient entities, we’d be living on farms or in jungles, hunting our own dinners without any of the accoutrements of modern life.
Today’s trend toward firms outsourcing specialized tasks to an increasingly diffuse and global workforce as part of their business growth strategies is a direct and positive evolution of that trend. Hyper-personal computing in the form of smart phones, cloud-based services, and democratized corporate IT each diminish the underlying logic upon which large, hermetically sealed corporations were created. In their place, we are seeing the much faster creation of nimble, porous firms. The larger firms that are left are increasingly organizing themselves to take advantage of these new third-party workers who easily take on highly specialized and personalized knowledge work. The goal is not just to specialize, but to use specialized resources in the most optimal fashion for a particular project.
In that context, there is much to be said to the credit of outsourcing.
The benefits of outsourcing
- Hiring specialists to take work off the plate of an internal employee leaves them time to focus on core tasks crucial to the company’s business. Otherwise, that employee would likely spend valuable time focused on less valued work that doesn’t suit their expertise in the first place. This wasted time contributes to delegation issues in the workplace; if you’ve ever spent hours fixing the office printer instead of drafting that critical client memo, you’re familiar with this phenomenon.
- Specialists provide a company with access to a new job for which it would not have otherwise hired a new employee. Take graphic design work, for example. For many small or independently owned companies, this is something they tend to cobble together based on existing employee skills every time new marketing collateral is put together. Hiring a dedicated, full-time graphic designer would just be unnecessary. It’s precisely in this type of niche that an outsourcing relationship proves mutually beneficial.
- Sending work to a specialist allows that person to professionalize and develop a craft that your company was never planning to invest a ton of time or resources into in the first place. Airlines, for example, aren’t in the business of cooking. They’d rather focus on transporting people from point A to point B. By outsourcing passengers’ meals, airlines can get a marketing edge while creating a new knowledge base and higher standards around airplane food.
- Outsourcing allows access to a vast talent pool beyond the confines of your four walls. If you’re looking for a specialist in a particular piece of equipment that you’re considering purchasing, your company may not have someone on hand to provide that information at all times. Outsourcing is a quick way to create a limited engagement with someone that has the exact information you’re looking for.
- We’ve moved beyond the age of the monolithic company that controlled everything from the coal mining to the general stores in the company towns. Those were the historical exception, and not all that great for employees either. Today, boutique practices and laser-sharp focus on a product is the new promise of rising companies. Outsourcing allows that culture to flourish.
At Prialto, encouraging optimal specialization is a key part of our business model. We believe that there is subtle complexity in even the most discreet tasks, like scheduling a large conference call across multiple time zones. Someone who focuses largely on just this task may not need a PhD, but will need to draw upon knowledge of the right tools and geographies and must understand the sensitivities of multiple business cultures and calling practices.
Prialto works with our members every day to identify tasks that don’t belong to a company’s specialization, set them up to be delegated, and train a virtual executive assistant to take them over. That allows our members to get back to growing their businesses. We believe that everyone can be a respected expert in something. Developing and leveraging that expertise makes everyone better off.