In past articles I’ve talked about how your company can benefit from outsourcing some functions and/or projects. But what about the reasons you might choose to outsource in the first place? If it isn’t broke, why fix it? Well, chances are pretty good that your company doesn’t have a full staff of functional experts in-house like HR, product development, marketing, engineering, sales training and accounting.
If you do and you’re a small or mid-size company, congratulations, but beware – watch your cash flow closely! If you’re in the 99.9% who don’t, the good news is that you can still access this pool of talent and pay for it as you need it.
Imagine unflappable experts coming in to take care of the confusing, chaotic or long-neglected aspects of your business. Some entrepreneurs don’t know what they don’t know, so they don’t realize they could have risky problems or lurking financial issues that are easily uncovered by an expert.
Here are a few reasons to outsource:
• Reduce and control costs. Outsourcing allows you to lower some categories of expenditures by converting fixed costs into variable costs. This results in significant savings to your company’s bottom line.
• Improve and maintain business focus. Most tasks that can be outsourced are very time consuming. By turning these over to an outsourced professional or an outsourcing service, you can fully focus on the things that you do best for your company.
• Tap world-class talent. Outsourcing service companies offer a comprehensive knowledge base, greater quality and a higher level of expertise than you can afford to hire on to your company’s staff.
• Free up internal resources. Your resources can be internally allocated to other functions or projects to make sure that day-to-day operations and customer service are being handled effectively and without interruption.
• Realize the benefits of that re-engineering. Outsourcing can really help your business achieve dramatic enhancements in your core and critical operations by redesigning your workflows and business processes.
Okay – So, what about the cons? How do you determine if outsourcing is right for your company? When making that determination, be sure you consider these potential pitfalls.
• Lack of control. You may be able to provide some direction, but you can’t necessarily control the day-to-day work of outsourced individuals. So, it’s very important for you to ensure that the contract with that service provider is very clear on the deliverables that you need.
• Communication issues. They don’t always come into play, but there is the potential for broken down communication caused by time zone differences, preferred communication method and reliable internet connections. Communicating that effectively will enhance your experience with that outsourced provider.
• Quality issues. When you outsource, expectations should be predetermined so that you’re not disappointed with the work quality because of a failure to communicate those expectations up front.
• Impact on your company culture. Some of your internal people could feel threatened by the use of outsourced services. From a functional standpoint, the outsourced task could be something that somebody has tried in-house but didn’t do well. That task can be outsourced so your in-house person can focus on the job at hand while the rest gets accomplished better, faster, and for less. It can be a challenge to manage the company culture aspect, but it’s all about communicating within your company about what you’re doing, why you’re doing it and the overall benefits.
Really, there are many pros and cons to outsourcing, all of which should be carefully considered before adopting the strategy. For many owners, outsourcing ultimately provides a way to eliminate the chaos in their business and grow profitably with complete peace of mind. Most importantly, it can enable you to focus on what you do best at instead of what is lacking in your business. It’s just another way to bring more of your genius by clearing those extraneous tasks from your plate – the sooner, the better!