Are you coming to grips with outsourcing?

The world is a small place now and you can outsource to anywhere in it.

 

 

The main reasons for outsourcing

The increasing complexity of business renders traditional approaches to managing them obsolete. Across the world, business owners and managers are increasingly outsourcing their non-core activities.

  • To improve
  • To improve cash flow.
  • To improve growth.
  • To get your business moving.
  • To improve working conditions.
  • Frees resources for more productive purposes.
  • Reduces costs and risk.
  • So you have time to do what you do best.
  • Provides expertise not available internally.
  • Reduce frustrations by outsourcing menial tasks and tasks your people don’t like.
  • Improve adaptability to change.
  • Increase your speed to market.
  • Improve your focus on core activities.
  • Reduces stress by freeing up key people.
  • Free up limited resources for other purposes, including your time.
  • Make capital available for more productive pursuits.
  • Provide a variable cost structure.

You can outsource anything from distribution and storage, bookkeeping, banking, debtor and creditor management, purchasing, computer maintenance, payroll, marketing, training to a whole range of information technology and business and customer support activities.

More and more services are now being outsourced to specialist providers.

 

Outsourcing must be carefully planned, with explicit objectives

Outsourcing is not an excuse to get rid of poorly managed, expensive, or misunderstood activities. Understand the costs of an activity and manage it effectively before evaluating its potential for outsourcing. Otherwise, you could be deciding to outsource something for the wrong reason, which you may regret later.

Define and plan the objectives you wish to achieve, a process that in most cases will require some expert outside facilitation.  What are the reasons why you should consider outsourcing, especially at the outset of your business?

Outsourcing can reduce the need to invest capital in non-core business activities. Instead of acquiring the resources through capital expenditures, they are contracted for on an “as used” operational expense basis.

 

“Outsourcing is inevitable, and I don’t think it’s necessarily treating people like things”.  Stephen Covey

 

A simple process for outsourcing

  1. Owner approval.
  2. Research the issues.
  3. Engagement planning.
  4. Specifications.
  5. Negotiations.
  6. Contract.
  7. Ongoing management.

 

Don’t spend a cent unless you can…

  • Improve customer service.
  • Close more business.
  • Open new markets and opportunities.
  • Increase profits.
  • Increase customer loyalty.
  • Reduce overheads.
  • Reduce the stress on your key people.

 

Key questions to ask

  • What is our core business?
  • How important is the function, you want to outsource?
  • Is it possible to outsource?
  • What is the business’s unique identity?
  • Does it match the key objectives of profitable growth and sustainability?

 

A few examples of the many things you can start outsourcing

  • Technology support and business process automation.
  • Bookkeeping.
  • Accounting.
  • Legal.
  • Secretarial.
  • Debtor collections.
  • Capital raising.
  • Fund Raising.
  • Telephone answering.
  • Product development.
  • Sales.
  • Marketing.
  • Website design and management.
  • Social media.
  • Creative.
  • Website design and management.
  • Social media.
  • Content marketing and Management.
  • Proposal writing.
  • Employee training.
  • Warehousing and logistics.
  • Production tasks.

 

 Words of caution about outsourcing

The transition to outsourcing requires:

  • Careful planning and attention to time frames.
  • Management of the ongoing processes.
  • Monitoring and review.
  • Periodic evaluation.
  • Looking at exit arrangements.

Outsourcing is something that clearly illustrates how new businesses, can completely miss out on the benefits of using modern methods of operating.  When there seems to be too much work we all tend to think of putting more people on in the first instance.  Why not ask yourself, where can I outsource this task?

 

[read more=”Personal Experience” less=”Personal Experience”]

Personal Experience

These guidelines will help to get better results through outsourcing.

Outsourcing is a term that has received a bad press in some circles because it’s associated with job losses that occur when large corporations ‘export’ jobs to countries with much lower labour costs.

But those of us who run small and home-based businesses should have a different perspective on outsourcing.

For us, outsourcing is the secret that lets us pull together the resources to handle temporary work overloads, reduce fixed costs, speed products to market, simplify distribution, provide more or better service to our customers, compete with our more established competitors, handle complex technology and in general enjoy our business and lifestyle better.

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