If you’re running a small business or launching a start-up, you're probably familiar with the strategy that you should be focusing on those things you’re great at because that could make the difference between growing or stalling your business.
For those activities that are not a core part of your business it might make better commercial sense to outsource those tasks to an expert, who can in the long run save you time and money - both of which you can invest back into the business.
Outsourcing can save money, protect your business from the unexpected and let's you focus on fostering growth.
Knowing in advance how you'll want to utilise outsourcing is important for determining how much you should invest, the type of vendor you need, plus what level of support or service plan you require.
So, lets assume you’ve taken the decision to outsource a particular task - may be you have just won a new contract or as a result of a mounting workload from existing clients you need some extra help. Now, the most important tasks that are vital to your operation you should carry out yourself, remaining in-house. You’ll have more control over these processes and these tasks are just too important for an external resource to execute and take responsibility for.
Why do companies outsource?
- Cost control
- Enables focus on core business activities to stimulate growth
- Solves capacity issues short or long term
- Enhances service quality by bringing in the experts
- Helps drives transformational change in an organisation
Regardless of the length of the contract period, the outsourcing supplier you select must have their skills and experience examined with the same attention to detail as if you were recruiting a new employee. You’re paying for their services after all, so you should ensure that they’re capable and can make a positive contribution to your business growth.
For most businesses IT infrastructure, systems, applications, software, hardware, etc. are expensive, complex and often require specific skills to install and manage them, which makes them an ideal fit for outsourcing.
The checklist below will help you develop a sense as to whether a particular vendor will meet your needs.
You need to make sure that the potential vendor has actually done what they say, and can provide references for previous work. You may also want to check that they have the resources to handle any additional business if your growth strategy works.
You’ll want to choose a vendor that has competent technical expertise to manage your outsourcing needs, especially if it involves IT and the many questions that you'll probably have around integration, infrastructure, software and hardware.
Find a vendor that takes the time and effort to get things done how you want. This is the type of company culture that you'll probably have in your own company, and it’s essential that your staff and the vendor's team are able to communicate effectively and work together seamlessly.
With the introduction of the new 2018 GDPR (General Data Protection Regulations) it can place heavy demands on an organisation to secure their IT systems and personal data. So use a vendor who knows the legislation and how to interpret it to not leave your company at risk.
It’s better to take at the beginning of your relationship questions on strategy and implementation. A vendor that is not afraid of asking difficult questions can add value by helping you to avoid making mistakes early on in the relationship.
You'll need to be sure that the vendor you’re picking is committed to changing with the times, flexible enough to go in multiple directions at once, and to be aware of system developments and changes that are happening and what the effect on your business could be.
What happens if something goes wrong? Better to address upfront what the policy is for fixing things in a timely manner so that you don't waste time trying to find solutions.
When you outsource to some extent you are giving up control. It's important then to have in place and work on the most effective way possible for you to communicate with and manage your outsourced task. You won't be able to oversee directly everything that they are doing but at least if channels of communication are open you can keep up to date with progress or challenges.
You'll need to agree with your vendor the preferred method of communication, response turn around times and what if any internal systems should a contractor have access to, etc.
Outsourcing can often be confused with the term "offshoring" which refers to contracting particular tasks to companies based in another country with the objective to reduce costs. Outsourcing can then wrongly be negatively perceived, so you'll need to ensure your team understand what you are doing and maintain an open relationship with your outsourcing vendor.
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