When is the right time to outsource?

Posted by John Kennedy on Aug 13, 2018 8:30:00 AM
John Kennedy

As companies grow, they become more complex - so business owners need help to sustain that growth and remain competitive. 

Whether outsourcing is the right growth strategy for your business begins with assessing the benefits of outsourcing against the costs of using internal resources.

The first question you need to ask yourself is what exactly could you outsource that would have an impact?

When considering what to outsource first you need understand fully - what impact would a particular project have on your business? Are you choosing the right project, do you understand enough about the different processes to see where you could make a difference?

There are a few common indicators to look for that could show you that now is the right time for you to consider outsourcing:

1. Understanding how your business works

The decision to outsource goes beyond any cost saving you would make versus the costs of keeping certain services internal. You have to understand your business and how it generates value, so unless your IT operations are what drives your business, you should consider outsourcing it.  

2. Time is money

If key members of your team are using a significant amount of time on back-office and other non-core tasks that deliver no growth value, it’s time to consider outsourcing. 

3. At this point of time, could outsourcing stimulate growth? 

Outsourcing gives you access to expertise that could help boost your business with a wide array of skillsets that you could not afford to have in-house. 

4. When outsourcing can make an impact with minimal disruption

For larger companies, that may mean moving your tech solutions to be hosted in the cloud and for smaller companies, that could mean outsourcing your IT needs so that you can get access to expert IT help to the same level as your competitors.

5. Any time is a good time

Using outsourcing can help keep costs lower in terms of operations, provide access to expert resources and offer an affordable route to scale up your business.

6. When it's not your core competency

You should never consider outsourcing your core competency. Conversely, you could consider outsourcing what is not core to your company.  May be outsource an IT service to a vendor that specialise in supporting your industry.

Outsourcing is a good idea when the task doesn’t serve to differentiate your business, and the IP operation is not a point of differentiation. 

7. When it frees up time to focus on higher yields

If your most effective IT resources are taking up time on low-impact projects then consider outsourcing this work. Free up time for higher yielding projects that motivate and stimulate your team and generate potentially more income.

8. When you've streamlined your processes

The right time to consider outsourcing your IT operation is when you have assessed and acquired deep knowledge on your processes within the IT department. For outsourcing to succeed in taking over what was an internal IT process, it is heavily reliant on how well the process has been documented. You'll need to detail the process, understand it's impact and know exactly how it fits into your operations.

9. When you need a specialist

It makes sense to outsource when you need to hire a specialised skill for a short period of time that you would not have the budget or needs for as a full time resource. 

10. When the IT department becomes swamped

Increasing system complexity and a shortage of skilled IT resources are driving many organisations to consider IT outsourcing to help manage their needs and re-direct energy to other parts of the business.

Regardless of the level of responsibility outsourced, it's critical that the business defines it's objectives, and has a clear view on how to compare the costs of a full time team vs. a task being outsourced. It's important to dedicate an internal resource to provide direction to an outsourcing vendor to ensure success. 

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Topics: IT, outsource, small business, technology

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