Out of the Box Innovations Ltd

A Modern Outsourcing Definition

A lightbulb with the filament spelling Outsourcing for an outsourcing definition article

A Modern Outsourcing Definition

(To go straight to the outsourcing definition, scroll down half the page. This page will only take a few minutes to read, so we recommend reading it in its entirety!)

What’s your definition of outsourcing?

Is it where you get rid of an unwanted task inside your company, such as outsourcing the cleaning?

Does it describe the packaging and selling of tasks to an overseas company that has a much lower cost structure? For example, outsourcing business process tasks to India?

At OOTBI, we think that this old fashioned view of outsourcing is obsolete at worst, and at best, only hints at the topic. Since the industrial revolution began, many tasks have been outsourced locally because of the specialisation of labour.

Since globalisation became a buzzword in the 1970s, we came to think of multinational corporations employing cheap labour. National companies started outsourcing tasks to save money. The rationale might have been that employees in certain countries might do a job half as fast, or half as well, but cost only a fifth or a tenth of a local person.

This view was partly correct, but a bit nationalistic and racist as well. Now, in the 2010s, the gaps have narrowed:

  • Wages are rising in the developing world, and stagnant in the developed world.
  • Education is improving in the developing world to close the skill gap rapidly.
  • Costs of materials, energy and resources are more homogeneous over time.
  • The internet allows people to work as efficiently in different countries as in separate offices.
  • We know that people of all cultures and races are capable of the same quality of work.

Bottom line, we see the definition of outsourcing from the industrial age or even the information age as inaccurate.

Fun fact: OOTBI is a remote working company. We opened a physical office, then closed it again after a year because we didn’t see any benefit. Why search for web developers in Exeter, UK, when our favourite go-to people are in Yerevan, Armenia?

Here’s our definition:

Outsourcing definition

Outsourcing is where you carefully select partners that can assist in your business objectives. The reasons may vary, perhaps the outsource partner can do the task cheaper and more efficiently.

Perhaps they are specialists, so you outsource, not to save money – but to get a higher level of skill and experience set to achieve the task at hand.

The best type of outsourcing is where you bring in a strategic partner that fills knowledge gaps in your organisation. The outsourcer will help bring synergy, focus, and market-trouncing advantages to your company. The net result will be a combination of higher market share, lower costs, and a better top and bottom line.

This concept exemplifies how we see ourselves at OOTBI. We can’t do your job as well as you can, but we can amplify your companies profile online.

With radio, TV and other traditional media losing influence and market share all the time, your online message should be your marketing focus. Your current client portfolio and staff are probably your main business assets. Fast-moving technology means that your business could be completely different in five to ten years.

When the generation that has grown up with smartphones, tablets and other technology, become company decision-makers, how will they be doing it? With augmented reality (AR) glasses? Will they be flying into your home town to visit personally? Who knows, perhaps there will be holographic conference bots to do the selling for you?

One thing is for sure; your online real estate is at least as necessary as your physical one. It might not seem that way now, but why not prepare for the future. After all, investment into online property is a fraction of the cost of the molecular alternative.

With brick and mortar real estate, we hear the phrase ‘location, location, location’. Online, our location can be everywhere, all the time. Contact OOTBI to experience ultimate outsourcing defined, in the results that your business sees.

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