Outsourcing: To Outsource Or Not To Outsource?

Outsourcing: To Outsource Or Not To Outsource?

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Feb 25, 2013 Raymond Huan (0)

The current global economic conditions have compelled the majority of business owners to cut into their budgets. The big question has become ‘how to make fewer dollars go further?’ The most recent data releases, however, show that employers are not letting people go in droves: that would be counter-productive.  More strategic choices are called for and one of those is outsourcing.

One of the most important skills for a business owner to develop is an understanding of what to undertake in-house and what to outsource. It is the simple question of leverage. If you can get menial, repetitive work done at a nominal rate per unit or per hour, then your time, your resources, are free to add high-value work to your enterprise.

Core versus no core in outsourcing

Most businesses, from tiny to huge, operate from the same perspective. As you add employees, there’s pressure to keep everyone occupied, to be busy. Of course, once you’re busy, there’s tremendous need to hire even more people, which continues the cycle.

If your goal is no longer volume, you can cherry pick. An architect, for example, can currently clutter his life and his reputation with a string of low –budget projects, but if he designs just a few buildings a year and digs deep to deliver superb quality, he actually increases his chances of getting great projects in the future.

Reducing overheads can be good for business. It’s not clear that selling for volume’s sake is always good for business; selling more to an ever larger (as in geographic expansion) audience is not necessarily the best way to business success. When your overhead plummets, the pressure to take on the wrong jobs, the wrong customers, disappears. You’re freer to pick the projects that make the business more money.

Think of business like a lunch buffet: you can’t eat everything on the buffet table. In business, we can’t have everything. Some of the players at the big end of town have tried that and it doesn’t work. Selecting the right projects can make profits go up. It can also dramatically improve the quality of work for the staff. Outsourcing is perfectly consistent with this more thoughtful approach to business.

Outsourcing allows you to concentrate on what you do best, save money, be more flexible and manage growth effectively. It also allows your business to gain access to outside expertise and technologies while also building and empowered team.

Tweet: “Outsourcing allows you to concentrate on what you do best.” http://ctt.ec/Oa226 @BizCoachRay

If managed successfully, outsourcing can help your business reduce its costs and make effective use of the knowledge and technical resources of another organization. Processes you could consider outsourcing include IT functions – you can outsource most IT functions, from network management to project work, website development, and data warehousing. You may benefit from the latest technology and software upgrades without having to invest in expensive systems or keep up with industry trends.

Compare the benefits and costs of completing a project in-house versus with the help of consultants or a business coach. Do a best- and worse-case scenario for each approach to help identify the risks.


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