As your business grows, it will become increasingly obvious that you need to start getting other people to do some of the work for you. When this happens, the choice is normally between employing more people to work within your business or outsourcing certain parts of your business to a specialist company.
The decision can be difficult, especially if you are a small concern with just a few employees. There does, however, come the point when you need specialist help so that neither you nor your staff are spending time doing things they are poorly equipped to do. It puts a strain on your business and affects the quality of the product or service you are offering the customer.
Outsourcing to a specialist provider:
When you think of outsourcing, the first thing that springs to mind are IT services, cleaning, or perhaps catering. These are the most obvious examples because we see them every day. However, outsourcing can benefit many industries and services.
For instance, around 75% of over 65s have at least two chronic health conditions in the US, so many practices outsource their care to a trusted Chronic Care Management company. This is an example of how outsourcing can be beneficial to both the service users and their families, as all aspects of care are taken care of for them.
This is not the only benefit of outsourcing as it can also have a positive effect on the bottom line. The costs of doing something yourself can be much greater than getting somebody will the skills, experience, and tools to do the job for you.
What and where to outsource:
However, this needs to be weighed up with the fact that you lose oversight of much of that part of your business. As they are working on your behalf, any mistake they make will be perceived by your customers as your mistake, which can damage your business.
For this reason, choosing which tasks to outsource, and deciding who to outsource them too, can be some of the most important decisions you will make about your business’s future.
The advantages of outsourcing:
The advantages of outsourcing are many, so when you decide whether or not to outsource a particular part of your business, you need to see how it can benefit you and weigh that up with the potential risk. Here are some of the main advantages for you to consider:
- First amongst these is the ability to spend more time on the core parts of your business. Outsourcing simple or mundane tasks can free up specialist staff to focus on their strengths and deliver your projects more quickly and to a higher quality.
- This will also be true of the outsourced task. Now that is in the hands of a specialist provider, it will be done more efficiently and to a higher quality than those who did have better things to do.
- As mentioned above, this presents a cost-saving for your business as you have specialist staff spending less time doing mundane tasks and more time doing what you pay them for.
- The result of this is that your specialist staff can take on more work in the same amount of time, increasing the amount of business you can do and increasing your revenue as a result.
- In turn, this gives you a greater competitive advantage in your industry if your business is delivering quality results faster than anyone else
- With fewer staff members spending time doing a mundane task, or one they are poorly equipped to do, this also increases your business’s flexibility and ability to adapt to change.
The disadvantages of outsourcing:
These, of course, are the results of correctly choosing which tasks or part of your business to outsource and making the right choice about who you are outsourcing those tasks to. There is another side to this that you need to consider, and that is what can happen when you make the wrong choice:
- The service the company delivers, over time, falls short of what you would expect. Because you have limited oversight on what they do, you might only find this out via customer feedback (which might be too late)
- Members of the company will have some access to your business and staff. As a result, they could see or hear things they could make public and harm your business.
- Your deal with the outsourcing company might not be flexible enough so that they cannot accommodate to changes you make in your business.
- The contract with the company could be based on the working relationship you have with their management. If that management changes or the company is bought by a larger entity, that can cause problems.
- Alternatively, that company could go out of business, leaving you and your customers high and dry. This is particularly important if the company in question manages your data or takes payments from customers.
- If the company is in another country, the price of the contract may be appealing, and the service excellent. But, if the company is in a different time zone, it can make communication with them problematic. For instance, if you have a critical IT issue at 9 am, but the support is not available until 2 pm because of the time difference, your business will suffer.
- This is also the case when companies in other countries have different public holidays than ones you have locally. Again, you have a critical issue and find your support is either closed or on skeleton staffing levels until the next day.
These are all factors you need to weigh up when considering what and where to outsource aspects of your business, as it can both cost money in the short term, but also save money in the longer term. Some of the decisions will be easy, yet others, such as where you will outsource your IT services and store your data, need to be a deliberate process.