Outsourcing Examples: 4 Common Things Companies Outsource

March 21, 2024 by Rebecca Ahn

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Best Outsourcing Examples to Help Your Business Grow in 2024

Outsourcing is all the rage right now. There has never been a better time to outsource work to other agencies in order to save money and/or time on operations that will give your business a boost. This can mean everything from core business process outsourcing examples like human resources or accounting to more project-based tasks like design or copywriting.

So what are some outsourcing examples we can explore to understand the scope of this workplace trend? In this article, we will look at four common outsourcing examples to help you consider what operations you may want to have performed outside of your own organization.

Let’s dive right in with the basics first.

What Exactly Is Outsourcing?

Outsourcing is a term used a lot on the news and in popular media, often referring to the concept of outsourcing jobs to foreign countries that could have been done in the US. However, this is only one specific example of outsourcing. 

At its core, outsourcing is a much broader concept. It simply means when an organization subcontracts out a portion of its activities or operations to a different party–be that a local, domestic, or foreign party.

In other words, outsourcing is the performing of a business endeavor outside of the original business.

This can involve subcontracting any part of the organization’s operations or value-chain to other companies or contractors that specialize in those activities. These outside contractors establish an outsourcing contract or similar legal agreement with the original client organization to perform those specific tasks on its behalf. This often means the work is performed under the client organization’s name and any work product completed remains owned by the client organization at its conclusion.

Of course, choosing the right outside party to outsource to is of paramount importance and requires thorough due diligence before deciding how, when, and by whom the business activities in question would best be performed. Then you want to make sure your internal staff is trained and prepared to manage the whole outsourcing process with your chosen outside contractors to keep all parties aligned on goals, expectations, and communications. 

All of this will depend on the specific tasks or operations you want to outsource and what solution is right for that situation. So let’s get into some of the most common examples of outsourcing and what considerations they might entail.

What Are Examples of Outsourcing?

The various types of work that can be outsourced vary widely across industry sectors. Some of the most common outsourcing examples of business activities include HR exit interviews, IT, manufacturing, distribution and shipping, facilities management, supply chain management, customer service and support, research and development, marketing, sales, design, content, engineering, accounting and bookkeeping, and legal documentation.

As you can see, it’s possible to outsource just about any part of your business operations these days. From HR to sales, IT to manufacturing, everything under the sun has a way to be outsourced.

Examples of Outsourcing vs. Insourcing

But should you outsource these things? Or should you try to do them in-house? This insource vs. outsource debate largely depends on your organization’s needs and resources at the time.

Insourcing allows you to cut out the middleman and have more control over the process. On the other hand, outsourcing can save you time and money hiring or training internal staff to do these specialized tasks, while also saving your staff’s time to focus on other important tasks they’re already well-equipped to do.

If you are just getting started and have a small team, you may want to outsource some of these activities to help you get the ball rolling. Then as you grow, you may want to own those processes by bringing everything in-house, which–if you have the proper set up–should save you money in the long run.

The key is to consider all of the pros and cons of outsourcing versus doing these activities in-house with your own internal staff, weighing the possible downsides that might come with outsourcing against its many potential benefits for each specific situation.

Examples of Offshoring

The other path to consider is offshoring. Essentially, offshoring is an extension of outsourcing where the external third party hired to perform your chosen business tasks is located in a foreign country. There are certain situations when this example of outsourcing would be especially beneficial, such as …

Once again, it’s important to weigh the pros and cons of offshoring versus simply outsourcing these business tasks to a third party located in your same country. One might provide you with a wider variety of options to choose from at lower costs, while the other might allow you greater control, smoother communication, and fewer legal hurdles. 

When it comes down to it, outsourcing should be viewed as a tool. You should consider utilizing it when you need it. Ask yourself: Will it save you time? Will it save you money? These two things are vital for businesses to succeed. By cutting costs and allowing staff members to focus on work that is more impactful, outsourcing can give your organization a significant boost.

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Of course, it’s also good to be aware of all the advantages and drawbacks of outsourcing. To explore this more fully, let’s delve into the four most common outsourcing examples, their possible pros and cons, and some specific ways these activities could be outsourced for your organization.

1. Project-Based Outsourcing Examples

Projects can come in all shapes and sizes. For example, let’s say that you want to produce a few pieces of content to launch in an advertising campaign, but don’t have the creative staff onboard right now to pull it off in-house. Instead of building out an entire creative department for one project, it might make sense to work with a third-party to contract out that work for your current advertising project.

This allows you to find an ad agency that is an expert in their craft, making sure that you have everything you need to succeed. Agencies like these are abundantly available in every market, allowing you to compare and contrast and ultimately choose the right one for outsourcing your specific project.

One of the biggest concerns here is budget. Just like any market, the outsourcing market–especially the creative side of things–can range from cheap to extremely expensive. You’ll generally get what you pay for, so do your homework and make sure that whatever and whoever you go with will meet your business needs at a reasonable cost. 

This same example works for any project, not just a creative one. Perhaps you need an internal company email system set up, or a POS system, or something similar. You can outsource all of these projects in the same way, much like you would outsource the remodeling of your kitchen. 

The key is to clearly communicate your goals and expectations, and make sure your outsourcing party is aligned on that, so you can avoid any costly outsourcing setbacks or failures. Just do your homework before you decide to sign on the dotted line.

2. IT Outsourcing Examples

Our next outsourcing example is one of the biggest current trends. Whether it’s to develop a new app, maintain your current IT infrastructure, optimize your data management system, or really anything else that has to do with technology, companies all over the world have started to outsource their IT needs to outside agencies.

Why is this?

Well, for some, it’s a cheap way to ensure that servers keep running and emails continue being delivered without the headache of managing–and paying for–an entire IT department. A small business may find IT outsourcing a more cost-effective solution in this case. For others, the business may be growing too fast to be able to hire and train internal IT staff, and it would be more efficient to outsource the expansion of database and systems infrastructure to an outside expert who can build out what more is needed quickly enough to keep up with the growing demand. 

When it comes to information technology and management, outsourcing examples abound because–just as with the previous outsourcing example–you can rely on expert teams to do this specialized work without needing to hire or train the right individuals to do so in-house.

This can save your organization ample time and money. However, you still need to do your due diligence to make sure that the expert third party can fulfill your needs and meet your expectations, especially when it comes to bigger jobs like IT systems and services.

Most companies already outsource some of these tasks without realizing it. For example, many companies use Gmail for their email system, allowing the brunt of the technical know-how to fall on Google instead of their own IT department. Sure, it requires having staff members with enough experience to set up and use the Gmail platform, but it’s not nearly as technologically complex as setting up your own in-house mail servers.

As new tech enters the marketplace at increasing speeds, more and more things are becoming ideal examples for outsourcing, leaving internal IT departments feeling the pressure. Remember to always weigh the pros and cons of outsourcing before making the jump. This includes what may happen to your internal staff if you decide to outsource some or all of their job tasks to an outside provider.

3. Professional Services Outsourcing Examples

Though IT could be considered part of this section as well, what we’re talking about when we say “professional services” are those departments such as HR, legal, accounting, payroll, etc.

With a suite of different options to choose from nowadays, ranging from large global service providers to more automated software applications and virtual solutions, more and more companies have begun to seek professional assistance from outside entities.

Payroll is an excellent example of this. In today’s world, a company’s payroll can largely be conducted using external software and automated systems that can track everything from expenses and accounts payable to employee hours and compensation details, allowing you to pay workers on time, organize IRS paperwork, and do anything else needed to manage your payroll for you, so that you don’t have to.

The same can be said for accounting, bookkeeping, and other time-consuming, detail-oriented, paper-heavy tasks. Some organizations also outsource their HR practices and programs, especially when a company is just starting up and needs a cost-effective solution for covering their bases. Or in the case mentioned earlier, HR outplacement services like Careerminds can also be invaluable when outsourcing some or all of your organization’s activities means having to lay off internal staff who are currently doing those tasks.

The good news is a lot of these outsourcing systems are ideal for startups and new businesses, allowing them to remain as lean as possible while they make and launch their product. As businesses get larger, it might make more sense to develop these departments in-house so that they can have more control over how they work. What’s more, accounting, HR, and other professional services can also help you work out your larger business goals in a strategic sense, making them increasingly important to develop as the business grows.

4. Manufacturing Outsourcing Examples

Our fourth and final outsourcing example is manufacturing, which is possibly the most widely known and talked about example of outsourcing across all manner of industries and business sizes.

Even huge companies will outsource their production–if not their entire supply chain–because of the simple fact that it is often cheaper to make things overseas. Just about every electronics company outsources their manufacturing. The same can be said for clothing companies.

Remember, this form of outsourcing involving a third party located in a foreign country is also a form of offshoring, or what’s commonly called “offshore outsourcing.”

For this type of outsourcing–regardless of whether it’s foreign or domestically located–companies need to pay close attention to product quality throughout the outsourced manufacturing process. After all, just because you get it for cheap doesn’t mean it’s the right choice if your quality takes such a hit that it drives away business. So, once again, it’s crucial to compare the upsides and downsides of outsourcing before committing to a manufacturing process, especially if that involves substantial production that could have a significant impact on the health of your business.

Outsourcing Examples: Final Takeaways

When it comes to outsourcing, you have a ton of options in today’s world. We’ve just covered the four most common examples of outsourcing. These include project-based outsourcing examples such as advertising content production, IT outsourcing examples such as , professional services outsourcing such as human resources or accounting, and manufacturing outsourcing such as materials sourcing and production.

In the end, outsourcing all depends on what your business needs, how much they can spend, and how quickly they need it done. You may know how to perform a certain project, but will an outside team of experts be able to do the same thing faster and free up your internal staff to work on other valuable things? Or will outsourcing that project create more problems for you in terms of communication, creative control, ownership, or cost-savings? Do you need to outsource your manufacturing because it’s the only way to get your product to market? Or should you start with small-scale production in-house until your product demand increases?

Some of these questions will likely pop up as your business grows, and you never know when outsourcing might be the right strategy for your current predicament. It’s never been a better time to find quality third-party help to bring those projects, products, and innovations to life.

If you are ready to explore any of these or similar outsourcing examples, click below to download our specialized guide on outsourcing to help you weigh your options and choose the right strategy for your organization.

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Rebecca Ahn

Rebecca Ahn

Rebecca is a writer, editor, and business consultant with over 10 years of experience launching, managing, and coaching small to midsize companies on their business, marketing, and HR operations. She is a passionate people advocate who believes in building strong people, teams, and companies with empowering culture, content, and communication that facilitates meaningful results at every level and touchpoint. In her spare time, Rebecca is an avid traveler and nomad who also enjoys writing about travel safety and savvy. Learn more on her LinkedIn page.

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