Ideally, outsourcing involves hiring a vendor to carry out some business tasks instead of handling them in-house. It is a good way to save costs, increase efficiency and productivity as well as allow business owners to focus on tasks that are more important. In addition, outsourcing to a well-equipped vendor allows you to tap into those resources that your business can’t yet afford, keeping you up to date with innovation.
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However, outsourcing also poses some risks to a business, as you have no control over these tasks. The quality of the service might be compromised and it is possible to miss deadlines, which can be detrimental to the business. That is why it is important to be careful when outsourcing.
What to outsource
With so many professionals opting to leave the 9-5 traditional work routine to work as contractors and freelancers, it has become easy to find a vendor for almost every business task. You might also have read about the benefits of outsourcing to small businesses. However, the fact that you can easily find a vendor or that you stand to save some money on operational costs are not enough reasons for you to start outsourcing. Additionally, it is also lame to outsource a task just because you don’t like handling it. Before deciding which tasks to outsource, assess your business and lookout for the core competences, capabilities and weaknesses.
- Any task that is core to the business should not be outsourced. A business risks losing the aspect that sets it apart from competition when it outsources such tasks. For instance, a products design company should not outsource any task regarding internal design.
- A small business lacks the resources to hire experts full-time. In such a case, outsourcing for a CFO to keep an eye on accounts makes sense. Additionally, tasks that require specialized knowledge but don’t call for a full-time arrangement can be outsourced. Such include graphic designers, website designer and the like.
- Tasks that can free up time to focus on business growth, or save money to use as capital in other areas can be outsourced. For instance, payroll management, especially with international employees can be outsourced to an international PEO, such as NH Global Partners, saving the need to hire an in-house expert as well as freeing time and stress to focus on other things.
- Innovation plays a big part in growing a business by keeping up with the needs of the customers. If a small business can’t find the resources to invest in this aspect, it makes sense to tap into the capabilities of an established firm.
Whom to outsource to
Just as it is important for a business to hire the right individuals, choosing a vendor should be handled with the same weight. Though working from a different location, the right vendor should help you carry your vision and work towards your goals. Consider the following when deciding on a vendor.
- Competence- Even if a task is being handled from off-premises, there shouldn’t be any disconnections. Your reputation in customer care is at risk if, for instance, you outsource your call center and the vendor fails to give an excellent service. Additionally, ensure that the team is well trained for the tasks as well as on how to use the tools and technologies employed for the tasks. Tasks should be completed with minimal supervision from you.
- Communication- Communication and collaboration should flow freely between you and the vendor for the tasks to be completed successfully. For instance, working with a company from a different time zone can cause some delays. You might need to reconsider if such delays can cost you the business.
- Trustworthiness- The working relationship between you and the vendor is purely based on trust. Before committing to a vendor, it is important that you vet the company. Search the internet for reviews and visit the site if possible. It is also good to ask for referrals from your circle when looking for a vendor.
After you have decided on whom to work with, the next step would be to put everything you agree on in writing. Ensure that you state all your expectation in terms of quality and duration.
At this era of vast competition, it is important to look for ways that can help you stay ahead of the competition. Outsourcing helps you achieve this in various ways.
Dave Burrell is a business advisor for several companies in Arkansas and Asia now. He helped many of them create branches in China, Japan, and the Philippines, and have been quite exposed to business-making in those markets. He has experience working in a range of industries and providing technical support in topics such as business growth, market expansion, and product development. Currently, he is also serving as an Expert at Globalization Partner and provides technical advice for its China EOR solutions targeting U.S. International businesses. Burrell is passionate about family, languages, traveling, and reading.