The first step in outsourcing is to identify your areas of focus. Although your company may have many components, you should only focus on those that will make you stand out from your competitors. Nike, for example, focuses on design of their products, and outsources the manufacturing process. You might have departments that do not relate to your core competencies, like finance or IT. Outsourcing these tasks will help you focus on what makes your business stand out.
Basecamp’s outsourcing case
In this article we’ll examine Basecamp’s outsourcing example. While this software helps businesses manage their employees, it started out as a relatively small startup with a small in-house team. As the company grew, its internal workflow became a problem. Jason Fried, the founder of Basecamp, realized that he needed assistance with his company’s critical operations and began outsourcing them. Outsourcing to companies with the necessary skills helped Basecamp become more organized and systematic.
Although the benefits of outsourcing may be obvious, it is still important to consider the bottom line. Basecamp saved a lot of money and time by outsourcing. Because it was more affordable to hire professionals from a smaller area, the company hired a remote staff. The company was able to hire talented people and make necessary changes. Basecamp is now a more efficient company with a great product.
WhatsApp’s outsourcing project to Russia
Since its inception in 2012, WhatsApp has been outsourcing its development process. Back then, it had a development team of thirty full-time employees and five part-time developers, all based in Mountain View, California. The startup was under pressure to cut costs and decided to outsource its project to Russia to find skilled developers at a fraction of the price. Some of the offshore developers were relocated to the US to work for the company as they grew.
WhatsApp’s staff grew and they were unable expand their technology or hire more people. They turned to Russia for remote development, which helped them scale up and enter the global marketplace. Once WhatsApp had successfully reached the global stage, they relocated their development team to the US. One of the other projects they outsourced was beta testing for a new online collaboration tool, Slack. Slack’s Russian developers were capable of providing the quality that WhatsApp users demanded. Facebook bought the app for $19 billion.
Alibaba’s outsourcing to the U.S.
One of the most successful companies in the world is Alibaba. Jack Ma, the founder and CEO of Alibaba, outsourced the website development to a U.S. business to increase efficiency. The scarcity of dev talent in China forced Jack Ma to look elsewhere for the skills needed to scale Alibaba. He hired American developers with the skills he needed for a sustainable web platform. Alibaba was able obtain funding to expand and eventually went public in an IPO worth $25 billion. It is now the world’s largest online marketplace.
Jack Ma Yun was the founder of Alibaba in 1999. The company, then called China Yellow Pages, had difficulty finding qualified software engineers. Alibaba outsourced its software development work to a U.S. firm to address this problem. This solution helped the company build a global brand. It did come with a price. Alibaba has outsourced many projects to other countries since this outsourcing project.