Can’t Decide Whether Or Not To Outsource?…

April 11, 2017 4:38 pm

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If you’ve been running a business for some time, you’ve probably been contacted by countless firms offering outsourced services. You may have spoken to various other business owners who say that they outsource almost everything, and just as many who say outsourcing is one big scam. There’s no simple to answer to every situation, but there are certain considerations you should take whenever you’re considering outsourcing a specific task…

 

The Cost

 

The first thing you need to do when deciding whether or not to outsource is compare the cost of carrying a certain task out on your own steam against the estimated costs if you were to outsource it. If you’re planning on outsourcing part of a large project, include everything from personnel, consulting, software, and anything else you’ll need to cover. Use the same categories for the outsourcing option you’re chewing over, adjusting the cost for the first year, then the second, all the way up to however long you expect the contract to last. Having the cost of each option stacked against each other will give you a foundation for considering other factors…

 

The Benefits

 

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The next step in deciding whether to outsource is looking at the benefits of keeping the work in-house or giving it to another company. There can be a number of benefits to an outsourcing arrangement. An SEO agency may be able to execute an effective marketing campaign for a lower price than you’d have to cover, and an app development company may allow you to charge more for the end product thanks to some competitive advantages. Coming up with the potential benefits of an outsourcing decision isn’t too hard, but you’ll need to follow them up with estimated monetary benefits. A reduced need for labour is easy enough to quantify, but factors like cycle times can be a bit more of a challenge.

 

The Flexibility

 

Next up, think about all the more indirect benefits you can stand to gain from outsourcing a certain piece of work. These aren’t going to be measurable benefits like shaving down expenses, but rather options that you have available due to the outsourcing contract. For example, if you were to hire a reliable private server to host your website, you’ll be able to reduce loading times and include more reliable, interactive features on your site. This will support your marketing, and ultimately help you generate more leads.

 

The Risk

 

Finally, you need to think about the risks that come with outsourcing. There’s going to be at least some level of risk, regardless of what the company’s website tells you! The business you hire may file for bankruptcy midway through the contract, or your employees may not be all that quick to adapt a new process that you’ll introduce. Do your homework, both on the companies and their industries on a whole, and identify the biggest risk factors in outsourcing with these firms. Then, quantify how these risks could affect the cost and benefit of outsourcing, and determine whether it’s worth the gamble.

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