Outsourcing: Not Just CheaperFrom processing payroll to integrating IT, outsourcing certain functions can mean better talent at lower costs.

Despite the stigma often associated with it, outsourcing is widely used for a variety of business functions--and it's not always about finding the cheapest solution. The smartest small businesses farm out the functions that aren't their core expertise, which adds value and saves money.

"What they keep in-house is the competitive differentiator," says Jagdish Dalal, managing director of thought leadership for the International Association of Outsourcing Professionals and president of JDalal Associates, an IT and business process outsourcing company in Hartford, Conn. "Amazon immediately thought about using UPS for distribution. Dell kept its marketing and design in-house and the rest was outsourced."