It’s the age-old question: just because you can, should you? The same is true for business outsourcing. Over the years, thanks mainly to the internet and cloud computing, outsourcing has become a lifeline for many companies. Brining cost savings, a boost in productivity, and efficiency makes outsourcing a true competitive advantage for those who know what they’re doing. Companies have found success in hiring out everything from website design and accounting to account management – and everything in between. While there are a lot of success stories with outsourcing, it’s also not a sure thing. Unrealistic expectations, poor communication, lack of planning, the wrong partner, or conflicting interests are all common causes of outsourcing fails. But, these causes can be mitigated by first choosing the right projects or functions to outsource.
For instance, if you own a custom tee-shirt company, it may make sense to first hire outside consultant for accounting. Then, maybe contracting with an IT person and next maybe someone to handle digital marketing. By outsourcing, business owners are freed up to focus on the company’s growth. But what works for one company or one industry segment may not work for another. An IT service company or MSP may need to make a completely different gameplan, for example. So, what are the pros and cons of hiring out, and how can business leaders decide what’s right for them?
Think strategically and move slow
It starts with thinking strategically about what you – or your best employees – are good at, what is bogging down productivity, and how can bringing in an expert benefit the business. Moving too fast can end up increasing risks and diminishing potential returns you may have made in the first place. While different companies have different needs in terms of roles and responsibilities, here are critical guidelines for outsourcing success.
- Identify tasks that are critical but not necessarily strategic – In the example of a landscaping company, the business is responsible for building and maintaining healthy lawns and distinctive landscapes for clients. That might include design and installation services, or just one component of service. Where the company gets its turfgrass from or how the company schedules its team members is unlikely to directly impact the people who ultimately engage in the functions (unless something goes wrong). Given the fact that there’s a minimal strategic advantage to building a client invoice system in-house or purchasing big trucks to deliver pallets of grass, an outside partner may be the way to go. These specialists can complete these tasks more efficiently and at a lower cost to the business.
- Look at ‘commodity tasks’ – While the definition of what is and what isn’t a ‘commodity task’ is debatable depending on the company, it’s clear that this category is well suited to hiring out. In these cases, teams should focus on leveraging economies of scale that a partner can bring to the table. Redirecting money saved from bringing in outside partners can give other core areas of the business a boost. A customer service call center, a shipping partner, accounting, social media, application development, customer support, marketing, in some cases – these are all potential areas to look into for outsourcing.
- One-time tasks – Job functions that are ‘one-offs’ are also prime candidates for outsourcing. Are you launching a website? Creating a logo? Building a mobile app? The chances are, you’ll only have to put in the heavy-lifting on these projects once. It may be cost-effective to take a project like this to a third-party expert that can deliver on your timeline and within your allocated budget.
Move slowly – but in the right direction
As business leaders evaluate the pros and cons of hiring outside talent, it’s sometimes overwhelming looking at the sheer number of options available. Thinking you need to know absolutely everything and analyze every possible scenario before it happens, can paralyze leaders into in-action. Waiting too long to make a move can prevent organizations from realizing their true potential! And it can hamper growing the business healthily and sustainably. By starting small and tapping into the expertise of contractors, companies can experience game-changing benefits. Best of all these peaks come without the big risks and costs associated with hiring full-time internal employees to get the job done.