Think about it
There are few of us who don’t do some form of outsourcing every day. If you have a gardener, or use a cleaning service, or take your clothes to a dry cleaner you outsource that work. You bring in someone who has greater expertise and a set of particular skills that you don’t have. You to pay someone to do something for you.
As a result, your time and resources are put to a greater value.
The purest form of outsourcing represents bringing in someone who has greater expertise to perform a specific task.
There are two big reasons why someone should outsource: it brings in a higher skill set, and it frees up time to make more money.
Greater freedom is worth more than outsourcing costs.
For the most part, the tasks I mentioned are things we could perform ourselves; however we elect to have someone else do them.
Business outsourcing isn’t much different. Do you hire a CPA firm to do your taxes? Do you hire an attorney or law firm when you need legal work? These are examples of short-term outsourcing contracts. These are individuals with higher skills. It doesn’t make sense to bring them on full-time.
Top five outsourcing advantages
1. Focus on core activities:
Companies outsource because it allows them to stay focused on things they’re good at and on what makes money. A plethora of resources to set up a call center or to engage in other activities that could be handled by someone else doesn’t make sense, and for the most part should be handled by a third-party
2. Cost savings and competency:
Another key factor is that someone who specializes in a particular skill set can work cheaper and better than someone who has to go out, build the infrastructure, and learn a new aspect of a business in which they’re not really involved.
One example is a high-priced attorney. Generally speaking, a high-priced attorney is specialized in one area of the law in which they’ve invested years of learning.
Surveys show that high-priced attorneys actually cost their clients less money, compared to less specialized, lower-cost attorneys. Why? Because someone who specializes in a particular skill set already knows how to those types of problems for their clients.
A high-priced attorney specializes in one particular niche of law. They learn that aspect of the law so exhaustively that they can make arguments and defend issues to a finite degree and win cases most of the time. In comparison, a general attorney can’t. In cases of law, it shouldn’t be on-the-job training or another day at the office. There is a big difference in that mindset.
If you think you can hire someone to stay on board cheaper than to outsource the task, consider other costs associated with hiring an onsite employee such as training, using the facility, and performance
3. Reduced overhead:
Keep in mind, the overhead required to have internal staffing can be significant, especially if your current physical capacity is already at its limit. In other words, bringing in more staff requires a larger office, more furniture, and extra phone sets, computers, and office equipment. These are all real costs that need to be taken into account when considering whether to bring someone in or to hire an outsourcing firm.
4. Operational control:
Control of your business means that departments have accountability measures in place. Being able to step back and look at results rather than being involved in day-to-day activities can allow the business owner to focus more on the core, to see what’s really important, and determine what makes money.
Keep in mind that very few people go into business to conduct telemarketing surveys and handle customer service issues. Generally, they want to achieve those things in which they have a core competency. However, as a result of running the business, aspects need to be delegated.
When considering whether or not to outsource, ask yourself if you are willing to bring in an outside firm that is good at something outside of your core competence — and take your business to the next level.
Outsourcing gives you the ability to grow your staff quickly or to shrink it with ease. It also means that you avoid the cost of purchasing computer terminals, office furniture, and renting new space to expand your to accommodate more staff. In addition, you won’t be stuck with extra office space and equipment when the time comes to downsize your staff. There also won’t be any legacy cost with unemployment. It is not your problem.