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How Strategic Outsourcing Can Solve Key Business Challenges

Published March 28, 2023

Category: Procurement | Sourcing

Written by: Grace Lau
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Grace Lau

Grace Lau is the Director of Growth Content at Dialpad, an AI-powered cloud communication platform for better and easier team collaboration using Dialpad's guide to business enterprise transformation. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Grace has also written for other domains such as Remote Tools and WITI.

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As a business, it’s ok to admit when you may need a little helping hand here and there. In fact, it may be highly beneficial to do so.
Outsourcing means businesses can delegate menial tasks to third-party companies and concentrate their efforts on more pressing matters, such as customer satisfaction and generating a profit.
But what is strategic outsourcing, and how can it help you overcome common business challenges? 

What is strategic outsourcing?

Strategic outsourcing is when a company delegates internal tasks to a third party. This can include anything from a single business process, to a set of procedures, to a whole project, in some instances. 
So, why do businesses like the idea of outsourcing their work? The idea is to save time and money and refocus that attention on resources that will benefit from more observation. It can optimize production processes while reducing costs associated with the company’s daily tasks.
Many roles, such as human resources or IT, are frequently outsourced to third parties. Essentially, the outsourcing provider can take care of processes the business does not have the time or expertise to oversee.
The ultimate goal of outsourcing is to utilize external resources so that the technologies and experts can improve the efficiency of the company and its competitive advantage.
Another increasingly popular form of outsourcing is the use of virtual assistants, who can assist with tasks such as scheduling, data entry, and customer support. This allows businesses to focus on their core competencies while still benefiting from the added support and cost savings that outsourcing provides.

Types of strategic outsourcing

Outsourcing IT typically involves subcontracting an external specialist or IT company to care for all or part of a business’s tech needs. They are used in industries such as law, hospitality, and more. Their support ranges from software development to maintenance and support.
As we know, IT is essential for most businesses today. Companies in various industries have IT requirements or, at the very least, need assistance on a technology level. For many companies, it can be more cost-effective to contract a third-party IT management team than to create an in-house one. Companies often use IT outsourcing services to store and manage their data, although some businesses only outsource a fraction of IT functions.
It may come as no surprise that manufacturer outsourcing services can be rather industry-specific. For example, a catering machine manufacturer may have an outsourcing agreement with an industrial-scale bakery or wholesale food business. This could include building and maintaining all of the equipment. Outsourcing arrangements like this can significantly reduce costs and improve assembly time. 

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