It is a subject which business owners and/or managers wrestle with on a regular basis. Should I outsource certain parts of the operation and what will it mean for the business.
Unfortunately for a lot of executives outsourcing is not necessarily part of the overall management mix. It is not really considered unless something major goes wrong. (i.e. the need to cut costs)
It should not be this way. Outsourcing done right can reduce friction in a business, generate new ideas, alleviate workloads and boost productivity.
A regular look at your business, identifying potential weaknesses can be a good start to evaluate if you should give outsourcing a serious look.
Here are 7 areas and trouble spots to review regularly to get a feel if outsourcing is a solution for your business:
1. Are You Making Enough Money?
If your business is not generating enough free cash flow there is a chance that expenses are to high. Outsourcing is the go to solution for major corporations to trim overhead...it might be viable for you too. The easiest dollar to make is the dollar you do not spent.
2. Are You Overloaded Or Are Your Managers Overloaded?
If your day is to short and you do not seem to be able to get everything done it might be time to look at what is chewing up your time. If it is because of supervising employees and related business processes you might want to reorganize your company and use a good Business Process Outsourcer (BPO). They will make sure that the works gets done, relieving you from supervision and administrative tasks.
3. Do You Have Time To Be Creative Or Do You Get Stuck On Repetitive Tasks?
It is related to Point # 2. If you do not have the time to lean back in your chair and contemplate ideas which will ultimately advance your business...you might have to look what can be done differently. Fresh ideas and the ability to respond to changing market trends is what makes a business successful. If you feel you lack the time to do so it might be time to change a few things.
4. Do You Spent A Lot Of Time On Irregular Tasks?
This is once again related to # 2 and # 3. If you are spending a lot of time on processes which are not mission critical to the business and/or are not part of your regular schedule...it might be a good idea to see what you can do to relieve yourself.
5. Can Your Company Handle All Of The Requirements Your Clients Have ?
If you are in a situation where clients are looking for solutions which you cannot accommodate, it might be worth your time to investigate what can be done about it. If the issue is a lack of knowledge or qualifications by your employees then outsourcing these tasks will improve the service offering of your business while at the same time providing a cost advantage over your competition.
6. Does Your Company Have A Hard Time Finding The Right Employees ?
Every company wants to hire in such a way that the work product of the company does not suffer or perhaps even is improved. Of course, that also has to happen at the right salary. It has to fit into the overall pricing environment what your company can bear. If your company has a consistent problem finding the right hires at the right salary it might be time to think about hiring overseas.
7. You Want To Expand Your Product Offerings Without To Much Of Of An Investment?
One advantage outsourcing offers is that you can expand the offering your company has without having to reinvent the wheel, If you find the right BPO partner you can "plug and play" their offering into what your company offers. You broaden the capabilities of your business while at the same time not having to invest in personnel or fixed assets.
Every business owner should periodically evaluate the above mentioned key areas to get a sense if outsourcing is viable to advance the goals of the business. A lot of it comes down to personal preferences. A such some of the points mentioned above might not be on the radar when it comes to the decision whether or not to outsource.
One key point to remember though is that if all fails, outsourcing will deliver on cost cuts. It will reduce expenses and convert Capex spent into Opex spent.
At the end of the day this is what it comes down to for a lot of businesses..improve the bottom line.