Learning Center

Can Your Small Business Afford NOT to Outsource?

Written by delaPlex Software
April 28,2015

Can Your Small Business Afford NOT to Outsource?Today, small businesses have opportunities to compete with much larger entities in a global market. Digital technology has done much to level the playing field, offering companies a variety of ways to connect with potential customers. New technology has given companies new ways to build customer relationships, drive sales and improve operational efficiency.

The most successful companies are, and will be, those that adapt to change and leverage new technologies, while those that fail to keep pace risk being left behind by the competition.

It is a common practice for small businesses to outsource certain services. For example, they may have a payroll service prepare paychecks and related tax reports, or they may engage an accounting firm to prepare their financial statements.

However, when it comes to software development, many start-up entrepreneurs and owners of small businesses believe that they (or a trusted employee working onsite) must personally perform all tasks to ensure they are completed correctly.

They may be knowledgeable in a particular area, but it doesn't necessarily mean they can work on a related project without having the requisite training to gain expertise. If a task requires skills and time your company just doesn't have in-house, it’s time to outsource.

A great number also believe that they cannot afford to outsource at all as they must "run lean" and keep expenses to a minimum to succeed. In reality, such beliefs will contribute little to helping your business grow and compete.

Efficiency

Having the person with the most expertise handle a task is the most efficient, cost-effective method. Very few small businesses have — or need — a full-time IT department. As a result, you may be asking employees who do not have the necessary skills or experience to complete a task.

The best-case scenario is that the task will eventually be completed but require substantially longer. (In the meantime, the work for which the employee was actually hired is piling up or being shuffled to others who, again, may not have the skills to handle it.) The worst-case scenario is that the task is never completed or is unusable as delivered, meaning that the wages you paid to the employee while working on the task were a complete waste of money.

Outdated Tools

The IT world is changing so rapidly that keeping up with the latest innovations and technologies can be a full-time job. Business owners do not have the time or need to stay current on all changes. However, ordering or allowing a project to be completed with the wrong tools can be disastrous.

For example, few people would consider using MS-Access as the back-end database for their busy e-commerce site or developing a website using nothing more than HTML. Part of the job of an outsourced technology partner is to stay abreast of current methods and technologies, keep their skills updated and be able to recommend the appropriate tool for each task.

Opportunity Cost

As the owner of a small business, your primary functions are to grow your business, boost your revenue and increase your company's profitability. Interacting with customers, designing a new product or developing a new process to shorten the production time may be high on your list of priorities. Every minute you spend handling other tasks, therefore, is costing you money.

Compare the amount of new sales you could generate, for example, in an eight-hour period with the cost of outsourcing eight hours of work. You will likely discover that the analysis substantially favors outsourcing. Just as critical is the fact that without the right IT tools, you could be missing opportunities to build customer relationships by offering them a more engaging experience.

Keeping up with User Demands

Consumers have become increasingly comfortable with technology, and as a result, they are more demanding. They expect responsive web design, mobile apps, websites that load quickly, outstanding security and an engaging experience.

They want the ability to handle many tasks themselves, such as updating their address or checking an order status. Any time that you fail to meet their expectations, you risk alienating customers. Outsourcing can help you make sure that you employ the latest methods to interact with, market to and engage your customers.

Security Concerns

Security has become a major issue in recent years. Target, Home Depot, Sally Beauty Supply, Michael's, Goodwill Industries, JPMorgan Chase and many more have suffered massive data breaches during the previous two years. Even the Pentagon, the U.S. Department of Energy, the White House and several major defense contractors have been hacked with varying degrees of success.

While the managers of a small business might not stay current on vulnerabilities, malware and viruses, outsourced IT professionals must do so. They can advise clients on the most secure platforms and the best ways to safeguard data from hackers. As even a relatively minor breach could have serious implications for a small business in the form of financial loss or the loss of customers' trust, engaging an outsourced IT professional can pay handsome dividends.

Changing Market Forces

Small businesses tend to create business processes that seldom change unless there is a disruption in the market. Many of these disruptions are driven by advances in technology, such as the explosive growth of mobile devices and the Internet of Things.

Accurately predicting which innovations will be disruptive and which will fizzle out quickly can be a challenge. Although no one can be 100-percent certain of what the future holds, outsourced providers go to great lengths to determine which innovations will give each client the best return on investment, which also allows them to guide clients through any impact the new technology might have on their current business processes.

Today's businesses must be agile enough to respond quickly to changes in consumer attitudes, market conditions and competitors' actions. Those that are slow to respond or choose to remain stagnant risk seeing their businesses shrink rather than grow. As a partner for success, delaPlex Software offers virtual resources for executing development requirements; a reliable way to hire and retain software developers. They have built a trusted reputation developing commercial software for small companies to distinguish themselves in their marketplace.

All things considered, the question for small businesses is not whether they can afford to outsource. The real question is whether they can afford NOT to outsource.