To outsource successfully, that is the question
A dilemma “to outsource” or “not to outsource” seems to be on the sidelines. Today, business leaders are more attentive to a choice of a right partner and the benefits of acquiring technology as a service.
The decision to outsource in part business production processes is based on reasons of costs and intends to increase profitability and efficiency. However, many business leaders are cautious, if not outright wary of outsourcing. The main reason is fear to “lose control”.
We have two main objections to this relatively understandable fear. The first is, to persist in it means to go against the trend: in an economy increasingly oriented on segmentation of processes, products and clients, the claim to cover “all’’ production instances can be as ineffective as uncompetitive.
Secondly, in spite of opposing to outsourcing as a concept, the trend seems to indicate that business leaders are increasingly studying the possibilities to outsource in their respective firms. Among various options to analyze, the key is to determine which services to transfer to an external provider and, above all, what to consider when choosing a partner.
Knowing how to choose
On the way to outsource and not to die trying, the challenge is to increase competitiveness without loss of monitoring processes. For this reason, choosing the right partner is essential. Here are some recommendations:
- Specific knowledge: when outsourcing a particular area of our company, it is not enough to look at prices. It is important to evaluate differentiating resources of our candidate and to what extent he or she can transfer that knowledge to empower our business.
- Syncing: we can define this by other terms such as “compatibility” or “timing”. The essence of this concept is evaluating if our provider understands what aspects of our corporate image are most important and what our short to medium term goals are. This point is especially important in outsourcing customer services because if our outsourcer is going to work as a bridge to our real and potential customers, it is highly recommendable that he or she knows how to transmit the brand philosophy.
- We and others: an important aspect when evaluating outsourcing options is knowing who are the provider’s clients. A Business Innovation, for instance, suggests considering whether our candidate works with companies of equal or lesser size and whether those receive the same service.
Four keys to outsourcing technology
The importance of technology in today’s economy does not need further explanation. Virtually days ago, we emphasized that technological advances drive the new business schemes and challenge old concepts about work and consumption.
Given that technology plays this role, some business leaders believe that delegating to the third party is too risky. However, outsourcing has enormous advantages. Let us briefly analyze some of its main benefits:
- Costs reduction: let’s start with the most “visible”. Reducing the number of computers and/or servers immediately affects costs such as electricity and rental of physical space. The “hardware renewal” item needing constant upgrading can also go.
- “Outsourcing” adaptation: the pace of upgrading software tools can generate constant concerns and disbursements in small and medium businesses. When we outsource technology, we clearly outsource the dire need to be “up to date”.
- Competing better: only outsourcing makes it possible for medium businesses to access efficient and advanced software. Thus, the competitiveness gap between them and large companies shrinks notably.
- SaaS, effectiveness and accessibility: the increasingly widespread model of software as a service (SaaS) has provided a new form of technology outsourcing for companies. With practically no requirements to invest in the infrastructure and facilitate its compatibility with many devices (including smartphones and all kinds of tablets), SaaS appears to be a great option to reduce costs without losing effectiveness.
In the digital economy, the central issue is no longer “to outsource” or “not to outsource”. In any case, business leaders today focus their energies on implementation of “smart outsourcing” that involve a judicious choice of partners and a comprehensive understanding of the role that technology plays in economic growth.