Outsourcing allows small businesses to obtain services and expertise they could never develop in-house, focus on core competencies and, in many cases, cut costs and improve efficiency.
To determine what to outsource, consider:
- What not to outsource. What actions does your company perform that add value for the customer and give you a competitive edge? These are activities to keep in-house. Others are candidates for outsourcing.
- As your business grows, focus on having access to, not ownership of. For instance, some information technology vendors provide a particular software solution via access to a secure server as opposed to the client purchasing it off-the-shelf. The same goes with services. Some companies outsource the entire human resources function, for instance.
- When considering vendors, ask for referrals from companies similar to yours. Contact these companies and ask them what they like and dislike about the provider and how outsourcing is benefiting either their top or bottom lines.
Tap into experts, articlesMuch has been written about the value of outsourcing. Make use of free resources to find out what works and what doesn't.
Explore you IT outsourcing optionsInformation technology is one of the most commonly outsourced areas for small business. Few business owners are IT experts and technology changes quickly.
Going overseasToday businesses can tap into outsourcing partners anywhere. Protection of intellectual property, language barriers and other concerns prompt some businesses to use third-party companies to set up and manage outsourcing agreements outside of the U.S.
Shop aroundA variety of services are candidates for outsourcing. Some comparison shopping in advance can narrow potential partners down to two or three. Then ask for proposals.
Some go soloAn outsourcing arrangement can be with one person, and many former corporate executives have made second careers out of working as contractors for small companies. You might want to outsource the CFO function, for instance.
- Chances are, you already outsource something, whether it's cleaning services, direct mail or another lower-level function. Examine these relationships (length of contract, communication infrastructure, performance metrics, etc.) to determine what is working and what is not and apply this to higher-level functions that are candidates for outsourcing.
- Network within local and national associations to find new outsourcing opportunities. Nearly everything can be outsourced. Finding out what's offered in the marketplace will help to open your eyes to more opportunities.
- There is a Certified Outsourcing Professional (COP) designation granted by the International Association of Outsourcing Professionals. The group of 250 includes organizations that both use and provide outsourcing services.