When Should a Business Start Outsourcing Work?
The idea of outsourcing work is no longer a novelty. The concept of outsourcing has broadened since it was first introduced as a cost management solution in the early 70’s. Outsourcing came about to address a basic need of business; reduce costs as a way of improving the company’s bottom-line. Back then, businesses had not warmed up to the idea of adopting outsourcing solutions because economies were able to sustain industries.
As globalisation gained traction, business conditions changed. Technology would introduce processes and tools that would connect regions across the globe. Social media networks would flourish and businesses took notice of comparative cost advantages and economies of scale available in other countries. Outsourcing would now evolve to address a specific need; introduce efficiency in operations.
The year 2000 not only ushered in the new millennium but events that would shake global foundations and rewrite history. It was a tumultuous start to the new millennium with 9/11, political conflicts and economies worldwide crashing and burning. Companies instituted massive layoffs to survive and looked for strategies to thrive during a turbulent period. Once more, the concept of implementing outsourcing solutions would evolve to address a mutual need; build strategic partnerships to sustain productivity and profitability.
— Outsource How (@OutsourceHow) December 30, 2012
Outsourcing is a process that evolves according to the need that it is tasked to address.
It should be evident that the events of the new millennium have changed the global business environment. Globalisation has resulted in trade barriers lowered and political regimes once obstructive to business have been removed. Economies have opened up; continents continue to integrate which make the global business environment highly unpredictable and ambiguous. Thus, businesses will need to go through a cycle of identifying and adapting to changes and there will always be new tasks to be addressed.
When would a business start outsourcing work?
The world has come to a point where it does not matter if your business is big or small. You need to include outsourcing solutions in your business agenda to thrive in the face of an increasingly volatile business climate that will not abate in the short-term. Outsourcing will provide you with the processes needed to integrate both cost reduction and revenue generating activities under the same solution.
What types of work should businesses outsource?
— Project House (@ProjectHouseBiz) January 23, 2015
While the concept of outsourcing has undergone evolution, its basic, underlying principles remain unchanged. Business should outsource the following services:
Back office services- Particularly for small businesses that have limited resources, back office services need to be outsourced immediately because these create efficiency in the enterprise. Accounting, IT and administrative support are crucial to the business from an organizational standpoint but these are activities that detract from the business owner’s main objectives.
Highly specialized services- Business owners and CEO’s have to train their focus on tasks and responsibilities that have direct contributions to revenue generation. Services such as digital marketing and social media marketing are components of every revenue generating endeavor but most business owners do not have the requisite skills to run these effectively. And even if they did, it would still be best to outsource these services because these require a lot of time.
Final words about outsourcing work
As a strategic partnership where long-term and sustainable profitability are targets, businesses may consider outsourcing executive level and management level positions. The benefit in outsourcing these tasks is to ensure you have top management competencies overseeing your business especially in areas that are not covered by your core competencies. Another benefit of outsourcing work at the management level is you get to learn through feedback and interaction other approaches on making business work. Remember, this is outsourcing as a strategic partnership where interests are mutual.