Outsourcing – How and Why

Outsourcing is pretty straight forward, you hire an outside company to handle certain business activities for you. But why would you ever do this? When does it makes sense? And how do you successfully do it?

Many small and medium sized businesses use this strategy because it allows them to get services, product, or skills they would normally find hard to find or develop on their own. Equipment, expertise, and manpower are often large barriers for the typical SMB, and outsourcing offers a way to overcome these challenges.

Outsourcing creates opportunities for growth that wasn’t previously possible. It allows a business to increase profits, grow the business and pursue new opportunities that wouldn’t otherwise be available. In many instances, outsourcing pays for itself over time, even if it initially increases your operating costs3Simply put, outsourcing will give away some of your business tasks that can easily be managed by an independent entity, making life easier for business owners1.

So how do you find a good outsourcing company who can actually make your life easier and not destroy your business?  Here are 3 tips that might help.

  1. DO NOT Outsource Your Secret Sauce – “Small businesses must identify their core competencies and capabilities” says Marc Resnick, Ph.D., “Outsourcing any aspect of [these tasks] would be a big mistake because they would cease to offer anything that their own customers couldn’t get elsewhere. So, a small business that focuses on product design should not outsource anything related to developing its internal design talent or their design activities. But they should investigate all opportunities for outsourcing tangential processes like payroll services, IT and so on.”2
  2. Place Value on Outcomes Over Hours2 – In other words, is the company actually able to perform?  To determine this, you might consider visiting their operations and talking with Sr. management, talk to other companies that use them, find out if they invest in tools and technology to improve their internal processes, and understand their business model.
  3. Consider Other Factors Than Just Cost – For a small business operating on a strict budget, cost is important but it shouldn’t be the only consideration. There are many factors in addition to cost that should impact who you partner with, including the following3:
  • Reputation of the provider
  • Scope of services available
  • Speed of service
  • Experience and skill level
  • Portfolio or work history
  • Fit with your company priorities and goals
  • Ease of working together

i.t.NOW specializes in outsourced IT services.  We’ve developed processes, hire really smart people, and utilize best-in-class tools that help us maintain, support, and monitor your IT like a boss.  If I.T. isn’t your core competency, outsourcing may make sense. www.itnow.net, (801) 562-8778 x 2, sales@itnow.net.

 

Sources:

  1. chrisducker.com/how-outsourcing-work
  2. https://www.entrepreneur.com/article/204652
  3. https://www.businessnewsdaily.com/11231-how-to-outsource-effectively.html