MIDTERM TEST

OUTSOURCING

Khon Artem Amangeldinov Turar

 SO....

What do “insourcing” and

“outsourcing” mean?
- LEST SEE
EVERY NEW ROLE IN YOUR COMPANY CAN BE FILLED IN ONE OF TWO WAYS:

OUTSOURCING
is the hiring of an outside organization to perform a particular business function, typically partnering
with freelance professionals or specialized agencies.

INSOURCING
is what we'd call traditional recruiting—hiring an in-house employee to perform the role, be it software
development, accounting, or graphic design.

The modern idea of outsourcing is often traced back to Peter Drucker's 1989 article Sell the Mailroom, where he advocated
outsourcing “clerical, maintenance and support work” in an effort to increase efficiency and lower costs. Drucker argued that
outside organizations have to compete against each other for contracts, resulting in lower costs and greater efficiency than
equivalent in-house teams could achieve.Though few companies still have mailrooms, many businesses outsource areas like
accounting or customer support. In practice, though, outsourcing is no guarantee of improved performance or lower costs.
Both approaches are useful in certain situations; ultimately, the “right” choice will depend on the role you're looking to fill
and on your company culture and your recruiting vision.
 BEFORE START

WHY WE DECIDE TO
OUTSOURCE ROLES
TO FREELANCERS
AND AGENCIES?
THE DECISION TO OUTSOURCE ROLES TO FREELANCERS AND AGENCIES
OR TO INSOURCE THEM TO EMPLOYEES IMPACTS A :
WHY IT'S A GREAT INVESTMENT OPTION

Stability

Available skills Financial health

Growth Potential Quality of work

 BUT THE EXACT NATURE OF THAT IMPACT ISN'T EASY
TO PREDICT. THE CHOICE BETWEEN INSOURCING AND
OUTSOURCING IS RARELY BLACK AND WHITE, AND THE
“RIGHT” DECISION WILL BE UNIQUE TO YOUR BUSINESS.

SO TO HELP YOU STRUCTURE THOSE FIRST FEW

PIVOTAL ROLES, WE'RE SHARING A SIMPLE DECISION-
MAKING FRAMEWORK FOR WEIGHING THE PROS AND
CONS OF OUTSOURCING VS. INSOURCING.

lets see example of few companies

WhatsApp
BACK IN 2012, WHATSAPP HAD ONLY 30 FULL-
TIME AND 5 PART-TIME EMPLOYEES IN THEIR
SMALL OFFICE IN MOUNTAIN VIEW. BUT THIS
DIDN’T PREVENT IT FROM BECOMING ONE OF
THE MOST POPULAR CHAT APPS WORLDWIDE,
RACKING UP OVER 50 MILLION DOWNLOADS IN
JUST 3 YEARS AFTER ITS LAUNCH.

WITH BARELY ANY STARTING CAPITAL (THE SEED

ROUND WAS $250,000), WHATSAPP NEEDED TO
KEEP OPERATION COSTS DOWN. TO BUILD AND
LAUNCH THE PRODUCT, THE COMPANY TURNED
TO EASTERN EUROPE IN AN ATTEMPT TO
SOURCE THE REQUIRED TECH TALENT.
WHATSAPP HIRED OFFSHORE DEVELOPERS
FROM RUSSIA BECAUSE “THERE ARE EXCELLENT
ENGINEERS THERE”, ACCORDING TO CO-
FOUNDER, JAN KOUM.
$19BILLION
IN 2014, JUST TWO YEARS AFTER LAUNCH, THE COMPANY WAS SOLD
TO FACEBOOK FOR $19 BILLION.

KEY TAKEAWAY: THERE IS TALENT ALL OVER THE WORLD. IF YOU’RE LOOKING

TO SCALE, BUT NEED TO KEEP COSTS DOWN, LOOK TO OUTSOURCING WORK TO
TALENT GLOBALLY. LIKE WHATSAPP, AFTER YOU GROW, YOU CAN THINK ABOUT
RELOCATING YOUR TOP PLAYERS TO YOUR HOME OFFICE.
SKYPE
SKYPE IS ANOTHER COMPANY THAT YOU ARE
MOST LIKELY FAMILIAR WITH, AND PROBABLY USE
OFTEN

THIS IS ONE OF THE FIRST COMPANIES THAT

INTRODUCED THE IDEA OF EASILY
COMMUNICATING WITH SOMEONE VIA PHONE,
CHAT, VIDEO, NO MATTER WHERE THE OTHER
PERSON IS LOCATED IN THE WORLD.AS A LEADER
IN THIS INDUSTRY, SKYPE HAS REVOLUTIONIZED
THE WAY COMPANIES DO BUSINESS. IN FACT, THIS
TOOL HAS MADE COMMUNICATING WITH REMOTE
WORKERS EASIER FOR FIRMS ACROSS THE
GLOBE.THE BEST PART ABOUT IT IS THAT SKYPE
HAS OUTSOURCED THE BACK-END DEVELOPMENT
OF THE APP TO 3 ESTONIAN DEVELOPERS. WHILE
THEY INITIALLY OUTSOURCED THE DEVELOPMENT,
JUST LIKE WHATSAPP DID, SKYPE BROUGHT THESE
DEVELOPERS IN AS PARTNERS LATER.
 $8.5BILLION
SKYPE WAS PURCHASED BY MICROSOFT
IN 2011 FOR $8.5 BILLION AND REMAINS
ONE OF THE MOST IMPORTANT BUSINESS
COMMUNICATION TOOLS.
IF SKYPE HADN’T BEEN WILLING TO OUTSOURCE
WORK TO THE RIGHT DEVELOPERS IN ESTONIA,
PERHAPS IT MIGHT NOT BE WHAT IT IS TODAY.

KEY TAKEAWAY: DON’T LIMIT YOURSELF WHEN IT COMES TO HIRING

TALENT. FINDING THE RIGHT TEAM MAY INVOLVE OUTSOURCING TO THE
BEST-OF-THE-BEST ANYWHERE IN THE WORLD. TAKE THE TIME TO DO
YOUR RESEARCH AND FIND THE BEST PERSON FOR THE JOB YOU NEED
DONE.
 IN CONCLUSION

Outsourcing can help you find the right talent. It can

help you stick to your budget. It can free up time for
your talented team workers at home who are spending
too much time on mundane tasks.Outsourcing can be
the solution you need to grow your business properly
and continue to compete in on a global scale.
THANK YOU!