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Should I consider outsourcing?

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Outsourcing is not easy 

Outsourcing in most cases is cheaper, more efficient, more effective and more flexible than hiring in-house staff. So why are business owners so reluctant to outsource? The reason being is there are a number of risks that need to be mitigated in order to achieve a successful outsourced model.

So the big fear with outsourcing is that you are invariably detached from the people who you feel you need to be close to, which raises concerns about developing a strong cultural fit between your outsource suppliers and your own organisation.

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Concerns with outsourcing

You may be concerned about a loss of control if your staff are not working in the same physical location as you plus it is easier to instruct people who are in close proximity. From a pragmatic point of view, not being able to see and talk to your team means you feel that you are less in control and lack the visibility to spot potential problems and take decisive action.

You may also be worried about the track record of your outsourced provider. Will they maintain the high standards and deliver quality within deadlines?

Another common concern is around costs: will the prices quoted by your provider be set in stone or as the relationship develops will a number of hidden costs emerge (license fees, annual renewal fees, maintenance fees etc)?

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Risks associates with outsourcing

How reliable will your outsourced provider be? How do you know that your confidential information, company data and other assets will be safe in their hands? What will happen if things go wrong with your provider? Are they happy to share a detailed contingency plan with you so that you can feel assured that you will not be hung out to dry in the event that a serious problem arises? What level of importance does your provider attach to compliance? How can you be sure that laws and regulations will be strictly adhered to and that you will not be held liable for infringements?

It is important to ensure that you have a well thought through, strategic approach to outsourcing. To get the right plan in place, ensuring many of the issues outlined above can be overcome and the benefits of outsourcing outweighing the concerns. You can avoid many of the issues related to hiring and training in-house staff and build a much more agile, flexible and cost efficient business as long as you adopt the right approach.

 

 

Quality Level

How to approach outsourcing  

You want your outsource suppliers to be high quality and as reliable as an in-house team but without any of the drawbacks. There are never any firm guarantees of success but the right approach can prevent major headaches and save you a lot of money.

The real ‘trick’ with outsourcing is in the preparation. Understanding  your requirements and spending sufficient time during the selection process ensures that you find suppliers who share your values. 

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Thinking about outsourcing

Here are some items that need to be addressed:

• Evaluating your company’s current and future requirements

• Investigating specific outsourced providers with proven track records

• Evaluating providers’ core competencies to ensure we find the right match

• Discussing cost implications in detail and uncover any hidden costs before contracting the supplier

• Interviewing providers and ensure they will be a good cultural fit

• Ensuring that the provider will be able to deliver the service on time and to the right standard

• Challenging providers in regards to their data security and integrity

• Requesting from providers that they share their contingency plans in the event of serious problems arising

• Evaluating providers’ training programs and ability to support your business in the event of staff sickness or absence

• Discussing providers’ compliance policies to ensure that they will take on the responsibility (where appropriate) to adhere to laws and regulatory requirements

 

 

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Results if successful  

Cost saving is a key driver for businesses and often the number one factor which leads to outsourcing. There are no requirements to provide outsourced suppliers with employee benefits and you don’t need to spend money on office space to accommodate them.

In most cases you will have greater flexibility over costs. Instead of having to pay a regular monthly salary you often have the ability to increase or decrease hours according to business demands which means you can operate a leaner, more efficient business and use the savings to drive growth. Your training costs should also reduce as these are usually borne by your provider.

One of the other big advantages of using certain outsourcers is the perception it creates to your customers. Smaller companies can often be made to look much larger by taking on outsourced providers which deliver a range of services which would not be possible using an in-house team. This means that smaller companies are able to compete with larger companies as well as react quickly to new trends in the market by finding quality providers who can deliver a high quality service.