Back Sourcing: Why it can benefit start-ups in their business operation?

Running a start-up comes with its own set of challenges and obstacles down the line. As the owner, your plate will always full of responsibilities that can often be difficult to manage and the limited availability of resources make it even more challenging to carry out the business operations.

Well, small firms don’t have a big budget like the fully-established organization and to deal with this problem, they prefer to do outscoring. It seems more feasible because it is not possible to purchase all types of equipment and set an extensive infrastructure in the early stage. 

The need for back sourcing 

So, they prefer to outsource a third party who can do their job during the contract basis. It provides tons of benefits including cost-effective, highly experienced work and many others. But, as the contract ends or any problem arises between the outsourcing firm and the start-up, everything gets dissolved.

But, as your start-up will grow and turn into a more established business, there might be a requirement of all the tasks that you used to outsource.  In that case, it will be better to contact the outsource team or person for the job and hire them permanently if possible. This process is also referred to as back sourcing. Let us understand it more clearly. 

What exactly is backsourcing? 

Backsourcing refers to the process of re-performing the business tasks which it earlier used to get done from an outsourced company. However, the only difference is that this time the work will be done under the company’s roof by hiring in-house employees to do the work. There could be tons of reasons behind the backsourcing, including: 

• The start-up is growing and is now stable 
• The demand for full-time work for the outsourced tasks 
• Willing to increase the budget
• Outsourcing seems confusing or unproductive

Well, back sourcing also means that you will have to add more space to the office and get a set of equipment for the work. Well, if you are a start-up which has just started to stay ahead of cash flow, using all the savings might be the wrong choice. Best would be to the approach a lender who every long term funds like 12 months loans even with a bad credit score. 

What are the benefits of back sourcing? 

Well, most of the firms go with outsourcing when they don’t have enough resources to manage things on their own space. However, when you are established, going with back sourcing might sound like a better option to go with. Here are some of the significant benefits that your business can get with back sourcing: 

One of the most significant benefits of going with back sourcing is that you get direct control to check the quality of the work being done. When you get outsource your business tasks, you get the final product in the end, so making any changes just will take too much time. Well, controlling the quality of the work when it is not done in your office becomes too challenging.

With back sourcing, you might not feel any this issue because you can measure the quality of the task at any time possible. Not only this will save time but will ensure that the quality is maintained internally and externally both. It is an excellent indication of a growing company. 

Any start-up or small business will keep on changing its functionality and way of working as it grows further. Thus, changes will keep on occurring within the company from time to time, unlike any large scale organization that follows a static way of working.  

On the other hand, having an in-house team means it will be easier for them to adapt to any changes in the office. Hence, back sourcing gives more flexibility as you will have employees who will be working for full time rather than on a contract basis. 

Data are an integral part of a business, be it a small firm or large organization.  Thus, when you work with an outsourcing firm, there will always remain the risk of confidentiality, whether the firm is under contract or not. The useful business data leaked to your competitors could be a considerable loss and might even damage you drastically.

Therefore, having an in-house team is a better option as you will keep the work within the contract and the chances of any data leakage are much lesser than the outsourcing. You will be ensured that all the valuable data of the business are kept safely within the company, and you will be able to mount enough security to keep it safe. 

Well, saying that outsourcing is more cost-effective than having an in-house team always might not be right. When you are working with a third-party company, there will be chances that they might demand a rise in payment after a certain period.

Also, there could be possible hidden charges that you might face after receiving the monthly invoices from the outsourced agency. All this is not possible with back sourcing as the team will be given a monthly salary. 

When a firm does outsourcing, it also instills an unsecure feeling among the working employees of the company.  For them, outsourcing is just a signal that their job can be at risk at any time, which will affect employee retention and also their productivity.

While keeping a full team means that the employees know they can stay here for longer if they give their best to the company. It will overall boost the morale of every employee working for the company.

So, this was everything that you need to know about back sourcing and how it can help your business grow further in the market.  However, you must compare which one is more profitable to the company before making the decision and work better for you. 

Description: If you are a start-up business and growing further, then back sourcing could be a better option to get the work done in a better way.