Outsourcing is a big dilemma for small, growing businesses. Although most businesses use outsourcing at one point or another, the massive differences in execution can be confusing when you’re looking for some guidelines. When you’re chewing over whether or not to outsource certain tasks at your business, you need to think about the relevant cost savings, and the benefits to your operational efficiency. Here’s a closer look at the whole issue…
From an economic standpoint, any kind of outsourcing should increase the bottom line profit through the reduction of recurring operational expenses. This kind of analysis is often quite simple when determining a clear-cut cost reduction. Will this particular act of outsourcing reduce a major capital investment for employee and equipment costs? Aside from the cost reductions that come with outsourcing, you should also be paying attention to the quality of the services you’ll receive. When outsourcing, you should never come to a point where you have significantly lower costs, but also a major reduction in quality. Hiring in firms that do this completely defeats the objective!
Tech and HR
When you’re deciding whether or not to outsource, you have to make a point of analyzing prospective vendors’ technology and HR capabilities. Is the vendor in question going to be able to handle all the needs of your business in a given area? Is their software and equipment up-to-date? Are their staff trained, experienced, and able to execute the tasks you’ll be paying for successfully? With some niches, such as IT support for businesses, it can be easy enough to judge the company’s capabilities. However, with other services, you need to be able to look past the marketing rhetoric and make an objective decision. If their tech and HR isn’t up to the work you’re giving them, it’s definitely going to burn you.
Timeliness and Quality
These factors are just as important as how much you stand to save through outsourcing. If B2B services fail to deliver high-standard work within a given time frame, they’ll negatively offset the cost reduction you may have been aiming for. Be sure to make inquiries about the vendor’s past record, and what they have in the way of a disaster recovery process. You can’t afford to risk your operations being interrupted because of a problem in a vendor’s business, so do your homework!
Your Competitive Advantage
Many small business owners aren’t aware of it, but outsourced vendors can also become business partners. If the vendor’s reliable, will treat you like a priority client, and share their philosophy in getting a competitive edge in the market, then you could get a return on your investment much higher than you’d expect. If they’re capable and ready to go the extra mile for their clients, and perform work that will give them an edge in their niche, an outsourcing vendor can become an asset to your company in all kinds of ways. True, these vendors don’t come cheap, but there’s a good reason for this!