14 reasons to outsource © Chris Bloor

When work is subcontracted to an outside party it is called outsourcing. The word "outsourcing" became part of the business lexicon in the 1980's.

Did you realize that you can hire expert help from around the world - all from the comfort of your Sioux Falls office?

Today you can outsource nearly every kind of work.

Both small businesses and large corporations are taking advantage of outsourcing. Virtual assistants can do any work for you from anywhere in the world, including personal and household tasks, as long as the task doesn't require their physical presence.

Here are 14 reasons to consider outsourcing:

1. Cost savings. When outsourcing, you don't have to pay salary, vacation, health insurance and other benefits.

2. Cost restructuring. Operating leverage compares fixed costs to variable costs. Outsourcing helps change this ratio by making variable costs more predictable.

3. Improve quality. The subcontractor focuses on providing just that one task for you and can often provide better quality as a result because they aren't distracted with other job duties. Also, overseas skilled workers such as computer programmers tend to be very talented and have a strong work ethic. You get to tap into this when you hire them.

4. Knowledge. Access to freelancers all over the world means you get to tap a greater knowledge base than you do when hiring employees. If the freelancer doesn't prove to be competent, it's much easier to replace the freelancer.

5. Contract. You can draft a contract for services that you outsource and have legal recourse if the subcontractor does not live up to the terms or provide quality work.

6. Operational expertise. Access to operational expertise that would normally be too difficult to develop in-house.

7. Staffing issues. Access to a large pool of talent from the entire world, which only gets larger with each passing day.

8. Capacity management. An improved method of capacity management for services and technology where the risk in providing the excess capacity is borne by the supplier.

9. Catalyst for change. An organization can use an outsourcing agreement as a catalyst for major step change that cannot be achieved alone. The outsourcer becomes a Change agent in the process.

10. Reduce time to market. This can accelerate the time it takes to bring a new product to market. Outsourcing the various tasks involved in the development of the product increases efficiency.

11. Commodification. This is the trend of standardizing certain business procedures, like IT, so that businesses can intelligently buy at the right price. Commodification permits a wide range of businesses to acquire services that, previously, only large corporations were able to afford.

12. Risk management. An approach to risk management for some types of risks is to partner with an outsourcer who is better able to provide the mitigation.

13. Time zone. Another advantage to having access to a worldwide work force is that a task can be done during day shifts in different time zones. Therefore the work is seamless and available 24×7.

14. Customer Pressure. Customers may be happy with most aspects of your company but recommend outsourcing certain elements of it, such as customer service. By outsourcing you can relieve this customer pressure and satisfy your customers.

Outsourcing does have some disadvantages. Outsourcing is sometimes referred to as "offshoring" and attracts negative publicity at times, especially in India, where it is widely perceived that sweatshops are prevalent. In these sweatshops the workers are often paid very low wages and work in harsh conditions for very long hours. Typical items that are offshored are clothing items and electronics.

Call centers in foreign countries such as India have become more common but customers frequently complain because the foreign accents are sometimes difficult to understand.

This is especially irksome when trying to get technical support for a complex computer issue. These difficulties are now being mitigated by the use of live chat features (instant messaging) so that the customer does not have to understand an accent.

Even if the customer support person doesn't understand much English, they can copy and paste pre-written responses to the more common questions.

Another downside is the perception that American workers are losing jobs to overseas subcontractors and factories because the overseas workers are cheaper. Political candidates often seize on this as an issue, especially during presidential election years. In 2004 John Kerry described such businesses as "Benedict Arnold Corporations," especially if they incorporated their businesses overseas to avoid taxes.

Polls have shown that 71% of Americans believe that overseas jobs hurt the American economy and they believe the government should impose restrictions. It has been argued that lowering corporate taxes would eliminate the loss of jobs to overseas companies.

Having fewer employees can lead to decreased productivity. More employees can mean more synergy and brainstorming, providing the spark for improvement and new product ideas.

There can also be security risks involved with outsourcing. You don't have as much control as you do with an employee, even if you use a contract. Fraud can also happen, such as in the famous 2005 case when four customer service people stole $350,000 from Citibank customers.

Any publicly traded company will have to listen carefully to the shareholders if they have qualms about outsourcing for these reasons. Exploiting overseas workers is a very touchy subject with many customers as well so you will have to weigh the cost benefit of using overseas workers with the potential negative publicity.

Overall, outsourcing has been beneficial to companies of all sizes.

You don't even have to have a business in order to benefit from outsourcing.

A virtual assistant can assist you even if you are just an employee.

Are you behind on a project at work and need help with some last minute number crunching or spreadsheets?

A virtual assistant can help. And also help organize your personal life too. It can often be cost-efficient to delegate more menial tasks to a virtual assistant so that you can focus on more important work.

From Craigslist to Elance to Rentacoder to large overseas companies, the right subcontractor is never far away or difficult to find.