Look Before You Leap: How to Evaluate Your Outsourcing Options

Posted: 02/24/2020 - 03:00
Business Outsourcing

Outsourcing can improve efficiency while increasing the capacity and resources available to your in-house staff. The choice to outsource core business processes, though, deserves careful consideration. A strategic approach to outsourcing can help your company:

  • Eliminate chokepoints
  • Fill skill gaps
  • Improve process efficiency
  • Save money

However, it’s not always obvious which responsibilities you can hand off without disrupting your business operations.

Use this article as a guide to identify areas where outsourcing can benefit your business and select the right outsourced service for you.

1. Identify Bottlenecks and Inefficiencies at Your Company

Consider what’s causing challenges and slowdowns in your organization and why. Issues that arise from skill gaps, lack of staff or an overwhelming workload can often be improved by bringing in an outsourced team. Identify work that is repetitive, requires expertise and/or leaves employees with more time and resources when it’s removed. All three are ideal candidates for outsourcing.

Ask yourself, “Would outsourcing a certain task or process help to increase operational performance? Cut costs? Offer a strategic advantage?”

If the answer is “yes,” consider whether you can shift these responsibilities to an outsourced service. You can outsource to shorten or streamline a core process instead of eliminating it entirely, as with a calling service.

Some of the most commonly outsourced business processes are:

  • Accounting
  • IT services
  • Digital marketing

For example, IT is increasingly vital to business performance, yet it’s infeasible for most companies to develop expertise in this area. Hiring an IT service can help you increase efficiency and cut costs while freeing your employees to perform high-value tasks. It’s best to retain control of business processes that are essential to your competitive advantage and rewarding for employees.

2. Consider Your Resources and Organizational Structure

Like any hire, an outsourced service should fit within your finances and daily operations. Compare the cost of outsourcing these processes to having in-house staff execute them. If you have in-house resources to resolve your issues, you may not need to outsource. However, you may be able to hire a skilled expert to handle processes such as social media, bookkeeping or accounting for less than the people hours of a single employee.

Since you have less control over contractors than over employees, it’s important to evaluate whether it’s operationally feasible to outsource your core business processes. You will need to designate someone in your organization to establish and maintain a reliable point of contact with the provider. This person is responsible for monitoring the provider’s performance and ensuring that the agreed-upon tasks are executed adequately. Consider the practical and financial implications of managing one or more new personnel before hiring an outsourced service.

3. Find the Right Partner

Determining that you need an outsourcing service is just the first step — you need to find the right one. While a prospective partner will provide references, be sure to thoroughly conduct your own research into the company’s reputation. Use ratings and reviews, your network and any other available resources to make a final decision. Focus on how the firm performed for companies similar to yours and whether the provider can match your exact needs.

Outsourcing firms are plentiful, meaning you should seek a partner that’s experienced, reliable and communicative in the ways you need.

An ideal partner will be in a time zone that makes it easy to communicate and exchange deliverables. They should also be flexible enough to match and grow with the demands of their assigned role. Once you understand what you need from an outsourcing service, choose a partner that can handle your responsibilities without adding to your workload.

4. Evaluating Your Outsourcing Options

Evaluating your needs is just the beginning in deciding if outsourcing is right for you. Run a cost-benefit analysis of hiring an outsourced team and assess whether you can effectively manage it. A considered approach to outsourcing is the best way to ensure a smooth transition to more efficient, cost-effective operations.


About The Author

Grayson Kemper's picture

Grayson Kemper is a Content & Editorial Manager for Clutch, a research, ratings and reviews platform for B2B services and solutions providers.