9 benefits your company will gain from outsourcing

The world of technology is full of powerful new horizons—connected devices, machine learning, augmented reality, and more.

And even the more established parts of the software landscape offer plentiful opportunities—better data analysis, increased efficiency, and additional functionality.

But how do you turn these opportunities into reality in your business?

Innovation initiatives are far from guaranteed, and one of the reasons is that the ways of doing business in many companies actually fight against innovative progress.

So it may be that you need to reach outside of your organization in order to spark an innovative endeavor.

(Credit where credit is due: this post is indebted to Hao Dinh and his presentation on outsourcing that I saw at the Digital Summit in Charlotte, N.C. last month.)

Here are nine benefits that your company can gain from outsourcing for technology and software innovation:

1. Reduce costs

Even at a higher hourly rate than one of your employees, an outsource contractor can work cheaper, after you consider benefits, training time, and more. Every business knows this.

The secret of really unlocking more value happens when contractors can work better or faster than an employee would. And in the fast-moving world of software development and innovation, you’re more likely to find outsourcers with cutting-edge subject-matter expertise than you are to have that kind of specialization in house. Those advantages let you make progress faster—which is cheaper in the end.

2. Improve company tools

Every company has a tech stack that includes both hardware (from computers to IoT sensors) and software (from code to databases). At most companies, this tech stack is dated in some places—or maybe across the board.

Contractors can help you update or upgrade your tech stack so everyone can work smarter and faster. This may be a product of simply having more hours to accomplish more upgrades, thanks to outsource help, but it can also be the result of a contractor with expertise about how to make specific tools better. Either way, your company benefits from improved efficiency, happier employees who see obstacles on the daily grind removed, and customers who will be better served.

3. Improve company processes

Outsource expertise doesn’t just help with tools—it can also help with processes. A consultant can help uncover best practices that your company is currently missing—whether it’s software code reviews, quality assurance testing, penetration testing, regular upgrades, or something else.

This means you should listen to the questions your consultant asks (both during and before the engagement). If he or she brings up something you’re not doing, you may want to dig in and see if there’s a valuable process your company is currently missing.

4. Access hard-to-find skills

One of the revelations to me in Hao Linh’s presentation was how many of the best practitioners of cutting-edge technologies prefer the gig economy to full-time employment. So this means that if your company wants to hire a top machine learning engine developer, your best option may be a contractor.

This isn’t a good thing or a bad thing—it’s a reality that your business will need to adjust to. Being open to top-level talent looking for short-term gigs will open the gates to a better talent pool. Your company should seriously explore this option.

5. Free internal resources for other projects

Every company has limits. Often, we think of these limits in terms of money, because every business must operate on a budget. But bandwidth is a limit too.

When you’re facing a major innovation project, your internal team probably doesn’t have enough time to make the kind of progress you need to make on the timetable you want. That’s where outsourcers come in.

We’re working with two companies on major data innovation projects now, and both hired us so that their internal teams could focus on what they’re really good at. This maximizes their impact. Our work will support those internal initiatives and lead to product launches months (if not years) earlier than would have been the case without external help.

Working more efficiently (because your internal resources are focusing on what they do best) on an accelerated timetable (because you have outsourcers helping) helps you start realizing ROI sooner. And that’s a big win for your company.

6. Reduce risk of innovation process

We’ve talked about all the glorious benefits of innovation projects, but the truth is that there is risk in the process. Your idea may not be doable (at least not without a ton of time and money). It may be doable but something users are apathetic about (or even hate). Call it the New Coke risk.

When you outsource, you mitigate this risk in a few ways:
1) You reduce the cost of innovation, so if it doesn’t work, you’re not out as much money
2) You get another perspective on your innovative idea before you begin, so you have another chance to refine or perhaps pivot

The result is that you fail faster—or that you end up with a clearer path to ROI. Either way, you’re in better shape than when you began.

7. Get to market faster

One of the keys to ROI on innovation projects is getting to market at the right time. Often, that means getting to market first, to gain users faster without competition.

Adding outsourcers accelerates timetables and lets you get in front of customers quickly, whether with a prototype, an MVP, or a full-fledged offering. That’s a plus.

One note here—being first is not always best. Apple has made a killing not by being first but by being early as well as better. that’s why the iPhone is up to version 10 (oops, sorry, X) while Palm Pilot and Blackberry are little more than relics of history. Still, the ability to be first is an ideal arrow to have in your quiver. That way, you get to choose if it’s the right strategy (instead of having competitors determine your strategy for you).

8. Smash corporate stasis

Corporations tend toward the status-quo. That’s because businesses need policies and procedures to function, and those things lead to standardization.

That standardization can be the enemy of innovation. And because your employees are used to working in a standard way, it’s going to be hard to break out and be innovative. An outsourcer can bring new energy around innovation, and even new kinds of procedures that lead to innovation.

We’re talking to a major corporation right now that is choosing to bring in an outsource company to help them learn to be innovative. They recognize that their internal processes need a jolt. Many conversations with this and other companies convince us that this issue is incredibly common. That means there’s a good chance it affects you too.

9. Get unbiased inspiration

Another organizational culture dynamic that often hinders innovation is territorial thinking. Stakeholders care about how projects impact their customers or their KPI, but not the company as a whole.

Contractors don’t have these kinds of biases, so they can help your company look beyond the silos and identify the best solution. This is especially true when outsourcers help companies continually focus on customers and their wants and needs above all else. When this happens, the outsourcer’s independence is invaluable.

Conclusion

Outsourcers may or may not be the right fit for your organization. This list of benefits will help you better measure the ROI so you can make the right decision about outsourcing for your organization.

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