12 Reasons to Outsource

This is the second article featuring Reasons to Outsource.

When outsourcing you should consider the following:

• The supplier takes responsibility for the process but YOU need to actively be involved with the management of the relationship. It’s important you take your time when making decisions governing working with a service provider.
• Establishing a good working relationship is paramount to ensure longevity of the service; communication and regular review meetings throughout the set up process are essential.
• The CEO or MD of the Company should nominate a “champion”; a person within the organisation to take control and run with the project through to its implementation.
• It’s important that people within the business particularly within the area that is being evaluated for outsourcing have involvement with the project; they may have concerns over their jobs, so keep them informed.
• If staff are being transferred to the outsourcing provider then you will need to consider employment legislation.

Should I Outsource?

The obvious benefits of outsourcing are fiscal but they can also lead to a better strategy for your company by divesting yourself of non core activities or processes that have outgrown your business and by removing these non core activities can reap substantial benefits.

Consider the following:

• Will outsourcing free up your business to focus on its strategy, irrespective of whether its selling widgets or providing services.
• Is it going to improve the efficient running of an area of your business such as Payroll, Billing or I.T?
• Will you gain a competitive advantage? You will be better positioned to a manage your costs, by freeing up capital and having a clear picture of your fixed costs.

How do you make outsourcing work for you?

Have a measurement process – there should be financial benefits but you might be outsourcing to improve a specific business function such as customer service, reducing errors in billing or decreasing the time taken to undertake your payroll.

1. Know what you are getting into – these days you can outsource any area of your business e.g.Call Centre operations; I.T. Payroll & HR, Billing, Print, Finance Accounting.
2. Do you really need to outsource? I’ve talked about this previously does outsourcing fit into your business plan – in other words do you have a function which has become a burden to the business and no longer fits in with your core business competencies?
3. Selecting your service partner is also key in the successful migration of your business function; note I use the word partner rather than provider. If you are entering into a long relationship its not too dissimilar to a marriage you need to take into account the culture, the background and its track record in providing similar services to the one you are seeking to outsource.
4. Ensure you have an SLA that is flexible but at the same time articulates how performance is measured, what the pricing plan is, does it offer the flexibility to manage changes in your finances or industry; what happens if you introduce a new product or service and you are affected by a worsening of the economy your contract should also have an exit clause.
5. Have a clear exit strategy too and make sure your SLA contains a clause to that effect; in the unlikely event the relationship ends prematurely or your company needs to bring the outsourced function back in house due to economic changes in your marketplace.
6. Managing the process – the work or department that is being outsourced requires a period of time to understand and adjust to the process; this may result in a change of roles for personnel, an increase in the time management spend in overseeing the migration. Are you prepared to spend the time managing the relationship?

7. Would it be helpful to use an independent consultant someone who has knowledge of the process and will offer effective impartial advice and assist you in selecting the right outsource provider.

8. What are the costs to your business if you choose not to outsource? Will your business be affected if you can’t afford to invest in the expertise or facilities required to drive your business forward?
9. Weigh up the costs of administering the business function in house V outsourcing and this should include the costs of personnel and office space, consumables, equipment leased/hired etc
10. What are your expectations? You need to be realistic and by having a good working relationship with your outsource partner you can set realistic and achievable deliverables right from the outset.
11. On a final note, its always good to weigh the scales i.e. the FOR V AGAINST for outsourcing because when all is said and done its your business that will ultimately be affected by change and so outsourcing has to be a positive experience for both the Company outsourcing and the service provider delivering the solution or service.
12. As independent advisors, Digital Print Management work with a variety of service providers and solution specialists to ensure that customers receive the best service at the right price. We are not tied to any one supplier and therefore we aim to understand the customers requirements before offering a solution or recommending a service.

So if you are unclear as to where to start or how to manage the process and need some advice we provide free, no obligation consultations. Just call or email us.

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