Making Outsourcing Part Of Your Business
Many business owners have long considered outsourcing as a strategy reserved for big business, but technology has made it a more accessible tool for small businesses and for some small firms, outsourcing has made a powerful impact on their growth, productivity and bottom lines.
Let us consider the disadvantages of outsourcing, and by doing so, you will better understand what you have to do to be successful. You will discover, despite all your efforts to communicate, that your current employees do not fully understand why you are taking the outsourcing route. They will probably be fearful that their roles are next, and this can harm performance and possible co-operation. In addition, you will lose the sense of immediate control that you had and, instead of going down to the relevant office, you have to go through a process to achieve something that was very simple. Often when there is change, there is an element of pain. You may find that your outsource partner doesn’t give you the service you thought you were buying and, without proper review processes, correcting this can waste time and effort. Some of the drawbacks will be relatively obvious, but others will come into your perspective just at the wrong moment, such as when you can’t make sense of some information just prior to a board meeting. It really does require open, regular communication with all parties and clear, precise instructions. These disadvantages point up how your approach to outsourcing must be holistic and built on solid communications with trusted parties.
One area that nearly always gets less attention than it needs is training since many business owners expect the other party to “just know”. Investing in a little training will ensure the results you are seeking are understood. It is a significant extra cost that rarely makes itself known until after the contract is signed off. There will have been a communication to your existing staff about what is going on, but very little to show them how to get, for example, HR support now that it has been outsourced beyond a telephone number. The outsourced party may also require access to your documents and this process will require some set up issues that may require professional assistance. You only need access to the documents they will be working on, not your entire system.
For every business, the right time to outsource is different and outcomes can vary. Some businesses have in-house staff to handle daily activities, but may need external assistance to undertake new projects that don’t warrant another full-time employee or perhaps at peak times of the year i.e. End of Financial Year to support existing team for a period of time. When your business is unable to manage the day-to-day business activities and build the business satisfactorily, it may be time to consider outsourcing.
Often the problem is within the business owner themselves, learning to let go and have faith in someone else to enable the business to take advantage of outsourcing and grow the business. Don’t just outsource because you hate doing the task, sometimes there are things you don’t want to do but they are important to your core business and may be best held within house.
Most businesses will benefit from outsourcing processes like payroll services, IT, social media, marketing and so on. From the top level, you may choose a CFO-level person to come in a few times each month to provide financial analysis and ensure that the bookkeeper is handling the books; Accounts payable, data entry and shipping inventory are very time consuming and could be more efficiently outsourced; or any task that is not your core business but still necessary to free up some of your current staff. You will also have to do some serious business re-engineering especially in the way your team now communicate.
Many small businesses don’t realise that there are large differences among outsourcing providers and select the wrong ones merely based on price alone. An open and clear conversation with potential contractors regarding the key performance metrics is essential. If you are going to micromanage all of your outsourcing, the savings in time that is the whole point of outsourcing is lost. If you are guilty of micromanagement, then delegating the management of outsourcing relationships to another member of your team, a move that may help you let go and move on.
Although there are risks, outsourcing ultimately it offers business owners great advantages. The process allows you to build a team of skilled professionals without adding the expense of full-time employees, and to avoid getting bogged down with tasks that can be completed without your attention – ultimately referred to as “working smarter“. By outsourcing you are also able to focus on core competencies and that’s got to be a good thing.
What areas of your business do you outsource? What has been your biggest success story?