When It Makes Sense
to Outsource, and
How to Do It Wisely
By MJ Schwader , Amit Rai, Amit Sharma and Miriam Knight
Amit S: Well, there are three common reasons for
outsourcing. The most important reason is cost.
Especially for small or start-up businesses, there
are limited resources and in most cases are just a
few individuals who are working on multiple com-
ponents of a business. To run a business success-
fully and increase revenue, many critical compo-
nents have to be handled simultaneously. It could
be handling finances, it could be marketing, Hu-
man Resources, or payroll. It might even be manu-
facturing or R&D in some cases.
Miriam: Let’s start with the question of what is
outsourcing - Amit?
Amit S: Basically, outsourcing is any service or
product that you need to look outside your com-
pany to supply. It may be outsourcing of a techni-
cal task like web development or graphic design,
it may be a function like accounting, or it may be a
service like public relations. So anything we can’t
or don’t want to do in-house and are able to find
an outside supplier for can qualify as outsourcing.
Miriam: And why is it useful for people to do that?
What are the main reasons?
22 | HAPI Guide
Particularly in a start-up, business owners should
try to keep most of their time focused on their core
competence. This is what will drive the success of
their business. Other components, which may be
less important but still necessary for the business
to function properly, can be outsourced. This frees
the owner to focus on strategy and his or her areas
of expertise, and is more likely to deliver better re-
Outsourcing can help save costs as well. Let’s say
some new software or technology a business uses
is released six months down the line. If this function
is outsourced, the company won’t have to spend