Strategic Outsourcing: 4 Tips

In business, there’s a time to outsource and there’s a time to not. Outsourcing is a politically sensitive topic in any country. Therefore, businesses should approach the subject with extreme caution. As a manager or an owner, you should first consider what you hope to achieve by outsourcing. Obviously, you would want to increase production, save up on labor costs, and keep current in-house employees happy and unperturbed regarding their futures at your company. In general, many companies outsource commodity tasks and tasks that are important but not vital. So, here are important tips on how to outsource strategically:

1.     Core Business should be kept In-House

The core business is the main product or service offered by your company. These should never be outsourced, even if the production or labor costs are cheaper elsewhere. Tasks directly related to your core business should be conducted by in-house employees with contracts that ensure confidentiality and give the company intellectual property rights. For example, say you are a company like Global Resources that provides business consultations. Don’t hire outside contractors to do these jobs as it will compromise your entire business model.

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2.     Hire Local Contractors if Possible

Instead of offshoring, you may be able to reduce costs just as well by hiring local contractors on a part-time or project-wise basis. For example, if you need web designers to maintain the company website on a long-term basis, it’s more cost effective to hire contractors. Unless you are a web design company itself, hiring full-time employees to maintain the website that only requires a handful of hours per week will be unnecessarily expensive. Calculate the hours that each task needs, consider whether the task is cyclic, and then you will be able to determine whether you should hire or outsource.

3.     Outsource Short-Tem Projects

Now, if you needed a web designer to revamp your company site just this once, this is a job that you can outsource to save a lot of money. There are a number of tech companies located all over the world that provide high-quality work for relatively low prices. When you have a short term project like web designing, graphic creation and such, this is a good time to outsource.

4.     Outsource Tasks that Drain Resources

Some tasks are cheap to do in house, but might burden resources or employee time. Therefore, such tasks are better off outsourced. For example, if you have a large staff that needs to be managed, you can digitize management in-house for cheap. Doing so, however, would overwhelm your programmers who could be spending that time working to achieve a core business goal. Staff management, therefore, should be outsourced to a company that specializes in the subject.

Also, if you have cumbersome office tasks that require no expertise, consider hiring an unpaid intern instead of spending money on a temp or outsourcing.

Outsourcing is not something that should be done without careful thought. Don’t only think about the money you save by outsourcing; also think about the time, production value, and quality of work.

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