Maureen Hamilton, Partner
Reason 1: “Our organization has experienced growth over the past few years and we would like to offer enhanced services to our clients to remain competitive, but we really don’t want to consider expanding at this time. Providing these services in-house is just not an option for us.”
Reason 2: “One of my biggest problems as a business owner is having the time to concentrate on my business’s core competencies. There are so many other things that come with the responsibility of owning a business, and I would just rather not deal with many of those things.”
Reason 3: “I want to focus my time on developing new products and services so I can stay on the cutting edge of my niche, but I find myself getting too caught up in day-to-day tasks.”
Above are a few common complaints from people in the business world. Outsourcing of business services can solve all of these issues. For some business owners, the thought of outsourcing can be a scary proposition—but it shouldn’t be. Remember, you are not turning over control of your business to another organization. Rather, you are choosing a strategic partner to handle certain key functions that you do not need to be directly involved with, freeing yourself up to do the things that enable your business to continue along the path of prosperity. Sounds like a win/win right?
Let’s take a minute and look at some benefits of outsourcing:
- You would be able to adapt quickly to business change;
- Would improve quality, customer service and productivity;
- Provides access to people with specialized skills;
- Enables you to react quickly to competition;
- Maintains the cost of overhead, payroll, insurance, licensing, training and recruitment;
- Manages the risk associated with the increasing cost of maintaining human resources, benefits and employee-related taxes;
- Allows you to utilize your internal resources to focus on developing your business and satisfying your clientele;
- IT and business processes are in place that may save you time and excessive cost.
Outsourcing is not new; initially companies chose this option when faced with a lack of local resources. Outsourcing later became a tool to enhance the productivity, efficiency and performance levels across many industries and markets. It has become a necessity for most businesses seeking a competitive advantage.
To some, the word outsourcing has a bad stigma attached to it. When most people think of outsourcing, they think of sending American jobs to other countries half way around the world. But think of it another way… outsourcing is hiring a professional to handle certain business processes that you may not need to (or choose to) perform internally.
Even though there are a lot of benefits to outsourcing business processes, a lot of planning needs to be done to ensure you identify the correct strategic partner. Before even taking that step, buy-in at the senior level of your organization is always critical; it should be agreed to before any planning or other research is conducted. Once they have signed on to this idea, you are able to begin your search for the right strategic partner.
Although outsourcing has been around for decades, the success from this can be mitigated by not identifying the scope of the relationship OR by choosing the wrong provider.
Here are some things to consider when considering a strategic partner:
- What are your business objectives for outsourcing?
- Are there any contractual issues with your end-clients that would not enable you to outsource?
- What are the work processes that may be outsourced?
- What if any security or IT issues might be expected?
- Manage your expectations: What cost savings would be realized as a result? How many employees could be affected and could they be assigned elsewhere? (Note: remember the cost of recruitment before allowing employees to separate)
- Would this relationship be seamless to the customers?
- Establish production and quality metrics; all should be attainable and measurable. When selecting an outsource provider, cost is important but ensuring the quality and timeliness of their services is more important. At the end of the day, your product/service should be better, faster, cheaper and/or of higher quality.
- Ensure your selected partner has enough human and systemic resources to support your outsourcing requirements.
- When needing to work with and through issues, this partner relationship must possess the right chemistry. Ensure that you are able to build and establish rapport.
- Visit the outsourcing provider location(s) where possible. Engage not only the primary contact, but the managers or team leaders that will be working on your business needs.
- Research your selected supplier thoroughly.
- Where possible, start small. Allow your supplier and staff to work together to identify any exceptions in the process.
- Require that the provider document all tasks into procedures.
- Review procedures with those that have been doing the job for you to ensure adequate knowledge transfer has taken place.
- Communicate internally why management has selected to outsource parts of the operation. Communication must focus on the benefits to the company and emphasis on the ability to continue to grow the business.
- From an IT perspective, ensure your system is upgraded or modified so that the provider has the access needed, no more and no less. They need to have the right tools to do the job.
It is not an easy job to choose your strategic partner, but if you follow the above tips, you should have greater success in finding the partner that is right for you.
For more than 20 years, CaptureISG has been a resource used for small to large outsourcing projects, from human resource professionals to management consultants. In effect, we solve mission-critical business problems. Read about the advantages CaptureISG provides over competitors for your outsourcing and research needs.