Companies outsource work not only for cost effectiveness but also for efficiency, access to global talent, scalability, faster time-to-market, risk mitigation, enhanced focus on core competencies.
Why do Companies Choose to Outsource Work and how do they do that?
If you’re struggling with tasks better handled elsewhere or can’t find the right in-house talent, probably think about outsourcing. But I'm not sure if it’s really helpful or not and I want to know why companies choose to outsource work.
In short, outsourcing isn’t just a buzzword; it’s a proven strategy that can help your businesses focus on what you do best while leaving the rest to experts. It is like gaining access to world-class talent, cutting operational expenses by almost half, and bringing your ideas to life faster.
So, in this article, you will discuss, from why companies outsource to the best practices used by firms for their project—backed by real stats and insights.
Top 7 reasons why companies outsource: Real facts & stats
As we’ve delivered 1,000+ projects, earned 10+ awards, and gained recognition from top brands worldwide since 2010, we’ve seen firsthand how outsourcing can transform businesses. Below are our findings on why companies choose to outsource.
1. Cost-Effectiveness without compromising quality
From salaries and benefits to office space and equipment, the costs of maintaining an in-house team can add up quickly. That’s why cost-effectiveness is often the first reason companies consider outsourcing.
Here’s the kicker: outsourcing doesn’t just cut costs—it helps you invest smarter. So, instead of pouring resources into building an in-house team for every business function, such as if you want to build a mobile app. Hiring and training an internal team could take months, while outsourcing to a skilled agency who already has the tools, infrastructure, and experience to get the job done, could get you to market in half the time—without sacrificing quality.
Take this stat, Forbes reports that outsourcing IT can save companies up to 70% on operational costs, while Harvard Business Review highlights 20–30% savings on non-core processes like billing, payroll, recruitment, and lead generation.
So, in our research and view, outsourcing is especially beneficial for startups and SMBs, when every dollar counts.
2. Access to specialized talent
Gone are the days when talent was limited by geography. Outsourcing opens the door to a global pool of skilled professionals—people who are experts in their fields and can bring fresh ideas and perspectives to your business.
We already mentioned – cost savings are a big reason for IT outsourcing. But it’s not just about saving money; in discussions with our 500+ clients, about 48% acknowledge outsourcing as a solution to bridge the gap when suitable in-house talent is unavailable.
So, why struggle to find a React Native developer locally when you can tap into a global market of experts who’ve already worked on dozens of similar projects?
This isn’t just about hiring cheaper labor. It’s about hiring better talent. Whether you’re looking for a fractional CTO to steer your tech strategy or a team to handle your website maintenance, outsourcing gives you access to professionals who live and breathe their craft.
The best part? Outsourcing partners are often motivated to deliver top-tier results because your success is their success.
3. Focus on core competencies
In business, time is money. And let’s be honest—time spent managing tasks outside your expertise is time wasted. That’s why outsourcing is a no-brainer for companies that want to focus on what they do best.
Let’s say you’re a startup developing a groundbreaking SaaS product. Your core competency lies in innovating software solutions, not maintaining your website or handling customer support. So why divert your team’s attention to those areas when you can outsource them to experts?
But, this approach isn’t just for startups. Even major corporations outsource non-core tasks to free up internal resources. For example, during the lockdown(COVID-19), our staff augmentation services built a large team of highly skilled deep-tech software engineers specializing in Telecom, DevOps, Embedded Systems, and the Banking industry for India’s largest IT company, TCS.
Stat: According to Deloitte’s Global Outsourcing Survey, 65% of businesses reported that outsourcing enables them to concentrate more effectively on their core functions.
4. Scalability and Flexibility
Business needs change. Sometimes you need more resources for a big project; other times, you need to scale down. This is where outsourcing becomes your best ally. And,
16% of businesses cite flexibility as a major factor in choosing outsourcing partners as it allows you to adjust your team size, skill set, and capabilities on demand. Need 10 developers to meet a tight deadline? No problem. Want to scale back after a project wraps up? Easy. You’re not locked into long-term commitments or hefty payrolls—you pay for what you need when you need it.
In a world where agility is key to staying competitive, outsourcing gives you the freedom to adapt quickly without breaking the bank.
5. Reduced time to market
Speed can help you get to market quickly and stay ahead of your competitors, but it can also make or break your business due to even a small mistake—whether you’re launching a new product, deploying software, or rolling out a service.
Don’t worry, outsourcing can accelerate your timelines by giving access to experts who’ve done it all before. They know the shortcuts, the pitfalls to avoid, and the most efficient ways to achieve your goals.
So, instead of spending months assembling and training an in-house team, you can hit the ground running with seasoned professionals by outsourcing.
Source: https://www.agicent.com/blog/why-companies-outsource-work/
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