Businesses large and small increasingly consider outsourcing various aspects of their operations to other companies.
Typically, this not only represents cost savings but allows the business to streamline its operations and home in on and specialize in what it does best.
However, outsourcing is not as easily done as said. It is crucial the decision to outsource is a calculated one, and the business or organization that is outsourcing the tasks should be aware of all the possible benefits and risks that come with it.
Here are the five most important things to remember when you are considering outsourcing a part of your business or organization.
1. Types of Tasks Being Outsourced
There is no one aspect of organizational operations that is safe from being outsourced.
The human resources department is an excellent example of a service that can be outsourced.
So, what exactly is outsourcing and business process outsourcing?
Consider the example of an American cable company that outsources its customer service hotline to a call center in India or the Philippines. Companies can take the opportunity to export small business tasks, such as customer service and customer relations, overseas.
However, human resources can also be outsourced.
Many businesses are increasingly using temp agencies or third-party staffing agencies to fill positions within their business, as opposed to hiring internally and having a person or department responsible for this.
For specific business tasks, either an outside firm or an independent contractor can be hired to carry out jobs being outsourced. These tasks are diverse and far-ranging, yet are all commonly seen as nonessential to the core of what the business is or does.
Accounting, content creation, and graphic design are all examples of tasks that are commonly outsourced by businesses.
For example, rather than hiring an in-house accountant, a small business might hire an external accountant to do their taxes when the season comes around.
Similarly, rather than hiring a designer to do all the graphic design for a firm, companies will usually outsource this to a contractor when a new logo is desired.
Content creation and social media are areas of business that most operations outsource. Rather than hiring a person full-time to create product descriptions and run social media sites, a company will hire another business or an independent contractor to carry out these tasks for a fee.
2. Control Over Outcomes
Something you must think about when your business is considering outsourcing is the fact that you lose a considerable amount of control over the quality and exact outcome of the task being outsourced.
For example, outsourcing the social media management of your small business often means you relinquish control over the exact nature and tone of what is being posted while retaining control of the general content of the posts in a broader sense.
In this way, there is some risk associated with outsourcing.
You must place a great deal of trust in the person or business you hire. They must share your vision and carry out the tasks in a way that is consistent with your wishes, desires, and business objectives.
Of course, a significant amount of control remains.
If you do not get the results you would like from the person or firm to which you have outsourced, then you always have the option to terminate or not renew your contract and choose another.
3. The Power of Specialization
The beauty of outsourcing is that it allows your business to focus on important company initiatives.
Rather than having to manage product design, quality control, packaging and shipping, customer service, and social media, companies can sit back and relax while outsourced contractors or consultants take care of their given tasks.
4. What Will Public and Client Perception Look Like?
The primary concern of many businesses when it comes to outsourcing is how it will be perceived by clients and the public — and rightly so.
Though the public and individuals broadly recognize the need for businesses to specialize and outsource, it remains more acceptable in the public eye in some applications than in others.
Consider the example of a large corporation designing a new logo or a small family-run business hiring someone to help with taxes.
Few members of the public, if any, would find outsourcing to a graphic design firm or an accounting firm to be personally objectionable. In fact, clients might consider these to be smart business moves that save money and time.
However, other types of outsourcing are viewed poorly by the public.
Many American companies have faced significant public backlash over the last 20 years for outsourcing their customer relations departments to call centers in India or other countries overseas where it is less expensive to hire workers.
As both examples indicate, the extent to which outsourcing is acceptable by the client or public is largely dependent on how it impacts them. So it must be managed carefully.
If it is something that has a significant negative impact on their quality of customer service experience or constitutes an economic loss of American jobs in favor of cheaper overseas labor, many American customers will see outsourcing in a negative light.
5. Outsourcing and Business Growth
Ultimately, outsourcing is undertaken for one reason and one reason only: to promote the growth of business without increasing costs.
For your typical business operation, trying to be everything to everyone is an exercise in futility, as it is difficult to be equally good at all aspects of the business at once.
However, if the need for a specific aspect of the business is growing, such as a sustained surge in customer service calls associated with growth or time of year, then it may be time to consider an in-house solution.
When managed appropriately, outsourcing can be a significant source of growth for your company while preserving the quality of your business and reducing costs. In an increasingly globalized world, the role of outsourcing in organizational processes will continue to grow.
About The Author
Cory Levins serves as the Director of Business Development for Air Sea Containers. Cory oversees the development and implementation of ASC’s internal and external marketing program, driving revenue and profits from the Miami FL headquarters. Before joining Air Sea Containers, Cory Levins was the Director of Business Development for Marketing and Real Estate Lending Companies. He enjoys spending time with his family, traveling, sports, and the ocean.