When it comes to managing certain business functions, companies have a lot of options. Two of the most popular options are outsourcing and using business software. Business software is pretty self-explanatory, as it’s a set of programs that uses a computer (or other electronic devices) to perform business functions. Outsourcing, on the other hand, is when a business hires another business (B2B) to perform certain business tasks for them.
Both options are helpful to just about any type of business, but not all businesses benefit from them in the same way. Here’s a closer look at the pros and cons of choosing to outsource and using business software.
Benefits of Outsourcing
Turning over certain business tasks to another company allows you and your team to put all of your focus and energy into core business tasks. For example, hiring a cleaning company to clean a store (instead of having the employees do it) allows the employees to focus on restocking and closing cash registers during closing time. Also, a hired cleaning service is hired to do just that, so they’re less likely to cut corners.
Other benefits include:
- Prevents burnout of full-time employees
- Companies are more specialized than your own staff
- The job gets done quicker
- Saves you money in the long run
Costs of Outsourcing
Because the company you hire for a particular job isn’t the same as the everyday staff you hired for your business, there can be some challenges. For example, a hired company doesn’t know your business like you or your employees do— all they know is that they were hired to do a specific job. However, all parts of a business eventually intertwine with one another, so this can present some issues.
Other downsides include:
- Losing partial control of certain business functions
- Problems with quality control
- Communication issues
- Slow response time (especially when outsourcing overseas)
- There are “general” companies that don’t specialize in a particular task
There are both good and bad sides to outsourcing, so each individual company will have to weigh out its own unique risks and rewards that come with outsourcing. Outsourcing isn’t necessarily all bad, especially since the majority of businesses choose this route (accounting, IT management, human resources, and administrative tasks are some of the most outsourced business functions). However, this is still an added cost.
Benefits of Using Business Software
One of the best things about using a software system is that it automates your business tasks. Everything is done at a much quicker pace than if you or an employee were to do it by hand. A simple example of a simple, yet popular business software is the smartphone app Slack that allows team members to communicate with each other, even if they’re not in the same country!
Other benefits offered by business software include:
- Allows your team to be more efficient
- Keeps track of productivity
- Your company becomes greener (paperless)
- Business software can perform a variety of functions, such as the software offered by JDE Managed Services
Costs of Using Business Software
Probably the biggest disadvantage to using business software is that it costs a lot of money— but so does outsourcing. Still, the software can come with its own specific set of problems, as technology tends to do at times. Some of these problems include:
- Issues with the software
- Software becomes outdated pretty quickly, so you have to continuously upgrade
- Upgrades aren’t always better than previous versions
Software that has an application for smartphones can be the most cumbersome. Apps experience issues all the time, but they’re not always resolved in a suitable amount of time. This means that companies must find other ways to get their job done without the convenience of these apps.
The Bottom Line
Both outsourcing and using business software is beneficial to the majority of all companies. When you think about it, using software is like a form of outsourcing because you’re still turning over a business function to another entity. With that being said, neither option is necessarily better or worse than the other.
In fact, it’s probably the best option for most companies to use a variation of both. Things like accounting, HR, and IT should be outsourced to companies that specialize in them, while communication, project management, and web development can all be achieved through purchasing business software. You can even use both for one task, such as hiring an accounting firm (outsourcing) and using accounting software that keeps track of all business transactions.