Is Outsourcing a Dirty Word?

shocked about outsourcing
Shocked about the "O" word?
The O word.

In today’s political discourse, few words have been demonized as much as outsourcing. Outsourcing has become the scapegoat for all our problems: from deficits and unemployment, to corporate greed and tax evasion. In his State of the Union address, President Obama even declared, “No, we will not go back to an economy weakened by outsourcing.”

But is outsourcing really all that bad?

I mean, we all do it.

Last night, did you make dinner yourself or did you go out? Did you grow the food yourself? Did you wash the dishes by hand or did you put them in the dishwasher?

This year, did you do your taxes yourself, or did you hire an accountant? Was your accountant human, or did they take the form of software, like Turbo Tax?

Outsourcing is a fact of life. I need a computer for my work, but have no idea how to make one myself. So I outsourced that task to Dell. It was an easy decision.

Simply defined, outsourcing is a way to procure what you need more effectively than you could do it yourself.

How we determine what “effectively” means though, varies by each situation. In basic terms you can think of three factors to measure effectiveness:

  1. Lower cost
  2. Greater speed
  3. Superior quality

For example, you probably could do your taxes yourself, but it will probably take you a long time and might not be as accurate as having them professionally done.

Outsourcing is about using resources efficiently. But while efficiency is universally praised, outsourcing remains vilified. Why?

Outsourcing has an image problem.

The image that comes to mind is the American worker who lost his job to a lower-priced doppelganger in India. I don’t mean to make light of this situation because it definitely does happen. And no one is advocating sweat shops or abusive employee-employer relationships.

But what about the thousands of small business owners who outsource critical elements of their operation every day? These entrepreneurs are creating value not just in their own communities, but in communities around the world as well.

Say you have an idea for a killer new website, but don’t know how to program a website. You could sit down and spend months or years learning html and php and web design, or you could hire someone who already has these skills. Your website gets built much faster and you start attracting customers sooner. In this way, outsourcing accelerates value creation.

The other misconception about outsourcing is that it’s all overseas. You might be surprised to learn there is a thriving outsourcing economy right here in the United States. Look at the busy marketplaces on Elance or oDesk and you’ll find thousands of talented local professionals ready to work.

Outsourcing doesn’t have to be a dirty word. After all, anything that promotes efficiency, productivity, and value creation can’t be so bad.

About the Author: Nick Loper is an online entrepreneur and the founder of, the leading source of honest virtual assistant reviews. On a typical day you can find him walking on his treadmill desk and dreaming of making the 4-Hour Work Week a reality.

Image: Ian Kahn