The world is becoming a smaller and smaller place. Thanks to open borders and advances in technology, companies are able to do more business. This brings a lot of benefits, but it also presents many problems.
Many businesses are struggling to adapt to this new world. Changing expectations have created a challenging environment that businesses need to thrive in. Many are turning to digital outsourcing as a way to simplify their operations.
But what does this term mean? This article will look at what digital outsourcing is and how some companies are using it.
Let’s look at how outsourcing on the digital frontier is taking shape today.
What Is Digital Outsourcing?
Unfortunately, the term “digital outsourcing” lacks a specific clarity in its name. The individual words are simple enough. Anything “digital refers” to technology. “Outsourcing” means letting a third party handle some of your business logistics.
The term refers to the process of outsourcing digital logistics to third-party companies. This is common in many industries that are used to working across borders.
Most people who use this term refer to the digital things that can be outsourced. The truth is, any outsourced work done online can be considered digital.
The most important part of this term is the use of technology itself. While other forms use physical means, outsourcing digitally uses technology to do business.
Why Companies Outsource Digitally
For many, the benefits of digital outsourcing seem rather obvious. In some cases, it’s a better alternative to the traditional way of doing things or it’s more profitable. Yet, this isn’t the entire case: for some businesses, it’s a means of survival.
The benefits of digital apply when the business lacks the means to do the work itself. This may be due to a lack of skill, labour, or other typical challenges many companies face. Businesses that recognise this weakness will often outsource the work to others. These companies or individuals will often do a better job.
When outsourced to another country, there may also be a financial benefit. Many businesses can save money by sending the work to other countries that pay lower wages. This usually means lower costs, which saves the business more money.
Beyond these benefits, for some companies, digital outsourcing is a means of survival. Technology has changed the entrepreneurial landscape regardless of the industry. Companies that fail to adapt to these changes often fall behind.
For some small businesses, outsourcing is the only way they can remain competitive. When a rival business can produce better results, your business will have no choice but to change or to die.
The Current State of Virtual Outsourcing
The current state of digital outsourcing is somewhat of a mixed bag. This is partly due to the lack of clarity in what the term means for businesses in different industries. The term “digital” itself can mean a variety of things and look different to one business than to another.
Many businesses are outsourcing digitally, that’s pretty clear. They are turning to third-party online businesses to handle their logistical operation. For large companies, this can include sending entire digital departments overseas. This can be as effective as sending other departments over like manufacturing.
Even small businesses are getting in on the trend. For example, many realtors are using virtual assistants to handle everyday business matters. Someone halfway across the world can handle daily office matters.
Still, even though plenty of businesses are adopting this trend, many are trying to figure out how to use it. Since there is no right way to digitally outsource, there’s no manual or roadmap to help. This leaves a lot of businesses in the state of trial and error. They have to see what works for their particular business needs and logistics.
Many businesses are seeing if this outsourcing is more effective than the normal way. For some, making this determination is almost impossible without trying it out. If they are unable to use a digital outsource strategy , they can’t compare it to the traditional way.
Certain industries are also facing this issue when it comes to digital outsourcing. For some industries, how this outsourcing can apply is rather obvious. Many industries related to technology or marketing adapted to this approach.
Others are facing greater obstacles in defining how to outsource digitally. Manufacturing industries often lack the digital presence that this form of outsourcing requires. In some cases, this includes the challenge to add any new technology into the mix of the industry.
The future of outsourcing work will come down to resolving this issue for each industry. As more companies adopt the practice, more concrete trends will emerge.
Even though there is no standard definition, companies are trying to incorporate it. This alone has caused a few problems, many of which are common with all forms of outsourcing.
Current Problems with Virtual Outsourcing
Digital outsourcing is facing the same issues other forms have experienced. There is the ethical issue of paying people overseas a much smaller wage for the same type of work. Different employees in different countries work in different conditions. This often benefits the business more than the individual employee.
Outsourcing is also often critiqued for taking jobs away from the home country. Many people argue that outsourcing is harmful to the home company by creating a shortage of jobs. This leaves skilled workers out and increases competition for the positions that remain.
The digital part of this outsourcing can also lead to issues that companies need to prepare for. Anything related to technology is susceptible to failure since technology breaks. Things like computers and servers are never full proof. They may succumb to Murphy’s Law: whatever can go wrong, will.
Digital outsourcing is also creating a greater need for cyber protection. There have been several incidents that show the security of digital is questionable. The potential for hackers to derail outsourcing should be a concern for any business.
Finally, there’s a problem that is unique to smaller businesses: accessibility. While corporations usually have the funds to adopt digital outsourcing, businesses are struggling. Even if they want to, not all businesses can afford to outsource their digital needs.
This not only creates competition, but also can put small businesses behind. In other words, if they can’t compete with the big boys, their chances of success diminish. This can feed the trend of larger corporations replacing the smaller competition.
To survive small businesses either need to adopt this outsourcing or find a niche of their own. It’s not impossible for a small business to outsource. Many businesses find success outsourcing everyday operations.
A competitive advance can also help small businesses. A good niche that lacks competition from big corporation may be necessary. Unfortunately, some of these niches are hard to find.
Small businesses usually need to do more research to know what is best for them. Understanding how outsourcing works is the first step. Knowing these potential issues is also required to avoid them in the first place.
This outsourcing can offer a lot of benefits to the business and customers. Digital outsourcing may also become an exclusive strategy for those who can afford to use it.
For most small businesses on their own, it will remain a matter of trial and error.
Thinking About the Future of Virtual Outsourcing
It is hard to say where this kind of outsourcing will lead in the future. The benefits for many businesses are clear. The issues many businesses face are also present.
Time itself will help bring clarity to some of this uncertainty. As more businesses use the concept, more clarity is likely. Companies big and small will play an active role in determining the best way to use outsourcing.
For a small businesses, the biggest factor will be their willingness to try. To stay competitive, each small business will need to understand the concept. More so, they will need to think about how it applies to them.
This will need to include more research and strategy. Virtual outsourcing can be very beneficial for businesses as long as they are smart about it. To use this outsourcing, businesses can’t go in blind.
This is particularly true for businesses in non-digital industries. Tech and digital marketing businesses can usually outsource their work since it’s virtual. For traditional businesses, it’s necessary to think about what can go digital.
This isn’t necessarily a difficult thing to do. Usually, anything that happens on a computer is good for outsourcing.
Surviving the Changing Digital Landscape
There are many things that small businesses can do to outsource many business needs. From virtual assistants to digital marketing firms, there are many options to explore. Sometimes, the most tricky part is going where to begin.
This is where I can help. If you want to explore how you may adopt a digital outsourcing approach to your business, get in touch with me. We can look at the potential of this form in greater detail to see how you can make it work for your business.