Freelancing, Outsourcing, or Offshoring? What Will Work Best for Your Business?
As the business world gets more and more competitive, delegating business processes to professionals outside of the company has proven to be a strategic option in addressing issues that have challenged business owners and decision-makers. It can help improve process efficiencies and productivity in operations. It helps your in-house staff focus on their core duties to the business. It allows you to allocate your resources more efficiently in terms of personnel, equipment, technology, and infrastructure. It can open opportunities for companies to access more qualified talent and resolve retention and attrition problems.
There are three common types of business processing support:
The guide below will help you to understand the differences of each type. More importantly, this will help you to determine which business processing support model will provide the best advantage for your business.
Freelancing involves contracting the services of professionals outside of your company for particular projects. For example, hiring a graphic artist to provide layouts for your company’s promotional collaterals. Most freelancers are not regular employees of any company and can accept projects from different clients.
Hiring a freelancer offers these advantages for your business:
- Eliminates overhead costs since freelancers have their own resources to work on projects
- Access to talents with specialised skills that are not available in your company
- Greater flexibility for short-term or long-term projects
- Reduces risks when you need to make changes without affecting your internal processes
- Ideal for additional help or overflow work
- Freelancers tend to have multiple clients and projects spinning at any given time.
Whilst hiring a freelancer has its benefits, there might be some concerns regarding their workload. The very nature of freelancing enables working on multiple projects for different clients. This could affect the timely delivery of their services which can impact your project’s timeline. Be mindful when you set up a contract with a freelancer. They might be working on projects for clients that are your direct competitors. Be clear on the boundaries of data security and how much information you’re allowed to share that’s relevant to the project. Have clear time line expectations, including the ability for revision work and costs associated with these revisions.
Outsourcing may have become an umbrella term for hiring a team via a third-party provider to work on a particular business process or function. In terms of comparison, outsourcing involves tapping the resources of a third-party provider to delegate certain business processes to a team outside of your company (local or offshore) but they are not dedicated to a singular client brand. For example, hiring an accounting team outside of your company to provide bookkeeping and payroll services whilst they’re also working for another client. Another common service is to engage with a local digital marketing agency, rather than have an in-house marketing team.
Local outsourcing has its advantages:
- Ease of understanding in terms of language and culture
- Outsourcing partner is familiar with local laws and regulations
- Same locale and time zone for more real-time engagement and quick turnaround
- Releases the burden of back-office work from your in-house staff so they can focus on their core tasks
- Provides their own IT resources to help reduce your overhead expenses
Bear in mind that if you decide to do local outsourcing, you might invest more in terms of local talent. If the cost of living is high, then the associated service fees are likely to commensurate to that. Talent shortage is another major issue with the increasing global demand for technically skilled talent that’s short in supply locally.
Since you’re dealing with a third-party provider, you may not be fully involved over the recruitment and selection of the team members. This could affect the quality of their output which may not match the standards that you require. The third-party provider may also assign the outsourced team to work on other projects for different clients. As a result, they are not entirely subject to your production control values. The cost of such services can also lend itself to bringing the skills “in-house” rather than engage with local consultants.
Offshoring involves delegating particular functions of your company operations to an offshore service provider from another country. For example, an Australian-based company builds an offshore digital marketing services team in the Philippines. Unlike shared services or freelancing, there is a dedicated remote team that is focussed solely on your needs. It’s like having another department in your company but located in a different country.
Offshore services offer unique advantages:
- Tapping into a global pool of highly qualified talent for outsourcing a wide variety of functions, from back-office to high-level jobs that require specialised skills
- More efficient investment of labour and resources
- Different time zones provide flexibility for 24/7 services
- Leverage international opportunities for business expansion
- Retain control of management and workload of the offshore team
- Ability to integrate your data security policies with an offshore services partner that’s in compliance with international standards of IT protection
- Allows you to be directly involved in the recruitment process to ensure you’ll get the best candidates
- Agile and scalable to keep up with your pace
Communication is a vital element to offshoring success but there may be concerns such as language gaps and differences in culture that might cause misunderstanding. That’s why most countries with offshore services use English as one of the primary languages of instruction. As such, the workforce has a high level of English proficiency which makes them ideal for building an offshore team. An efficient offshore staff provider also applies a thorough onboarding process that includes understanding each other’s cultures, laws, and regulations. This will ensure a seamless integration of the remote team to your company culture which will lead to better outcomes in work quality.
Guide questions to help you make an informed decision
Determine first what your objectives are before you select the type of business processing support that you’ll need. Here’s a list of questions to guide you:
- What kind of business processes do you want to delegate?
- Is the requirement short term, or long term?
- Do you have the bandwidth to provide the relevant onboarding?
- Are you struggling with handling non-core duties that distract you from focussing on your core business responsibilities?
- Do you need the services of a professional team for short-term or long-term projects?
- Are you concerned with maintaining security and business continuity?
- Are you having problems in attracting and retaining high quality talent?
- Do you need additional resources in other aspects of your business?
- Do you want to ensure full control over your business operations?
Expert offshore services provider for global-level opportunities
When it comes to offshore services, AS White Global has the proven expertise in building dedicated remote teams for different industries such as IT, software development, marketing, healthcare, insurance, accounting and finance, among others. We support businesses in Australia, New Zealand, US, and the UK by providing offshore staff solutions. You’ll have access to the most qualified talent from Vietnam, Malaysia, and the Philippines.
AS White Global is also one of the first Australian companies to attain an ISO27001 Information Security Management System certification. We ensure that stringent systems, policies and procedures are strictly applied and maintained to ensure high levels of data security and to protect the interests of our client partners.
If you would like to know more on which business processing support model would benefit your business, book a free consultation with us today.