If the to-do’s in the company exceed your own capacities or if you lack the expertise for certain tasks, outsourcing is a good way to free up resources or work with experts.
For many founders, there comes a moment when the tasks at hand no longer correspond to their own time resources or fully utilize them. If the company grows, this situation will arise sooner or later. It is relatively easy to find out whether the time has come: if the operational management of the company takes up so much time that there is no time left for strategic decisions, visions, and goals, external support should be considered. This can be realized in the form of processes and automation (tools), but also by freelancers or service providers—in short, through outsourcing. One area in the online casino industry where outsourcing can be particularly helpful is with regards to customer support, such as handling 20Bet login issues.
What is “outsourcing”?
The English word outsourcing for, i.e., the delivery of tasks and work steps to other companies or the self-employed. The more work steps are outsourced, the more time the founder has to deal with long-term and strategic decisions.
Definition: Outsourcing of services previously provided in-house to external contractors or service providers – Oxford Languages.
Pros and cons of outsourcing
Advantages
If tasks are passed on to external service providers, time resources are naturally created that can be used for growth-promoting tasks. It is not without reason that it is said that an entrepreneur should not work in the company but on it. This is difficult to implement in the start-up phase because, as a founder, you are initially responsible for everything. Later, when it’s more about growth, that will change first through outsourcing or employees.
But even during the initial phase, outsourcing plays an important role in most business areas. If you develop your own product, for example, you usually have it produced by an external manufacturer and hand over all creative tasks (packaging, logo, branding) to a designer. The reason for this is not necessarily a lack of time or resources, but a lack of know-how. If you are not familiar with packaging design yourself, it makes perfect sense to hand this issue over to an expert in the field. Outsourcing also increases the quality of the results, often at lower costs.
Many founders forget to include their own working hours in the cost accounting and to regard themselves as employees of their own company. At the beginning, return on investment and invested working time are of course disproportionate, but you should keep this aspect in mind and consider your own working time as an important resource for the company. So hiring a freelancer or expert is often cheaper than learning the subject yourself and accepting poorer results due to a lack of experience.
Disadvantages
In addition to the many advantages, there are also some disadvantages that can arise if they are implemented incorrectly. By handing over tasks, you always hand over part of the control to another company or an external person. The more important the outsourced task is, the more risky it is for the company, especially if there are no alternatives for implementation. For example, if you are looking for a manufacturer with a patented and unique production process, you are dependent on this manufacturer. Therefore, you should always check carefully whether you are becoming dependent on outsourcing or whether you are even accepting quality defects because you have outsourced your own key competencies.
If you hand over tasks to other people, the room for mistakes due to misunderstandings or communication barriers is significantly higher. Clear communication (e.g., through practical instructions, clear deadlines, and defined goals) is the be-all and end-all for efficient outsourcing and achieving the desired results. This in turn creates additional effort that should be planned accordingly. If more and more freelancers and service providers are gradually integrated into the workflow, it definitely makes sense to use a workflow tool.
Due to the resulting loss of control over individual tasks, it can happen that your own standards in the supply chain are not met. A sustainable company must, for example, check whether suppliers or service providers meet the relevant criteria. This aspect is particularly important if the company is already relatively large and has publicly stated positions (e.g. politics, sustainability, species protection, human rights etc.). If you work for a clearly positioned company with companies that take the opposite position or simply value other things, your own image can quickly be damaged.
When is outsourcing worthwhile?
Before you start outsourcing tasks to freelancers or service providers, you should check whether tools or other workflow systems might be an option. Many tasks can be automated, for example, or accelerated through clear work processes, which is generally cheaper and does not cause a loss of control. Only when personal processing or expertise is essential should one consider outsourcing and hiring freelancers or external companies.
As soon as the required working time is in a certain range between 20 and 40 hours per week, permanent employment of employees can be considered. The advantages compared to outsourcing are that your own employees are tied to the company, have no other clients depending on their position, and the loss of control remains very manageable.
In return, employees are significantly more expensive, and their own responsibility increases since the livelihood of employees is completely dependent on the employer. For core tasks and key competencies, a team of permanent employees is always more advantageous than if the company is made up of external service providers and freelancers, all of whom work on several projects at the same time. For some positions, such as those of designers or software developers, it is also difficult to hire really good people, since experts in this field can earn much more if they become self-employed.
