January, 2015

Inside back of outsourcing: pros and cons

Published: 15.01.2015 | 1959

Why put off until tomorrow what you can profitably delegate to others today? You may heard lots of jokes about this. Doesn’t it seem ridiculous – to pull essential but so burdensome activity at a loss? And even if your operations simply stop without logistics, accounting or IT-processes, these non-core aspects should not "pull" too much. This article provides you with advice how not to be mistaken with the choice of an outsourcing company and the solution benefits would not turn into serious consequences.

Cases when outsourcing is strategically vital.

1. Independent company will perform all the functions more competently and/or cheaper .

Even such venerable representatives of the modern market as Cisco could be an example. It is not a problem to build own computing devices for this American multinational company on network equipment development. However, not it be wiser to focus on improving network technologies that benefit tomorrow, while a partner company manufactures and assembles routers and switching equipment on Cisco requests? Wiser. This outsourcing partner owns 37 factories around the world, so that not only safes Cisco from headache, but also offers obvious benefits.

2. If the activity is totally not your competence.

Tasks delegation will not affect your company’s prospects, on the contrary, expands them. Supplementary administrative functions, accounting, data processing and equipment maintenance - all of this is extremely important, but requires resources that you could invest to your core problems tackling.

3. Such a decision eliminates your risks.

Outsourcing companies have precisely developed action plans and more options expanded for risks preventing (depending on industry) in comparison with yours. Will it be change in consumer preferences or technology - designated company cope better and faster, so, you will not incur losses.

4. It favors decision-making speed and organizational flexibility.

This point is resulted from the previous one. Everybody is protected from risks, current tasks find prompt solutions, these processes coordination is correct – so, you can concentrate on your dedicated directions, which benefits you.

What issues are covered by outsourcing ?

1. Costs reduction

Outsourcing is an alternative to full-time stuff with salary, vacation, sick leave and bonuses. In addition, of course, don’t forget about such expense item as taxation and workspace equipment (at the office with a rent to be paid).

Even not getting involved in the maze we can resume: monthly payment for outsourcing services will reduce financial planning and many times “release” your budget than in-house personnel (whose competence is also needed to be improved constantly

2. Operation Quality and speed increase

Specialized expertise gained by the outsourcer, and well-established work algorithms directly optimize your activities. Moreover, to achieve this goal you will not have to worry about the improvement of equipment and technologies, as well as staff training.

Outsourcing is a solution enhancing the best results being achieved because dedicated experts perform all the tasks

Оverall objectives are met and both sides benefit (win-win situation). And the customer has another lever of pressure (though, it may not be used) - the outsourcing partner also has a competitive market, so that arises the interest to deal with the tasks timely and at the highest level.

3. Risks reduction

Having in-house personnel for subsidiary tasks performance may seem advantageous only at first glance. Meanwhile, this fact costs can seriously set you back.How to deal with unsolved problems, while your employees are on vacation or on sick leave? What has to do, if the experts have left? What to take when the competence of employees is not enough to solve the problems? Each of these situations hinders your workflows and requires investments - time, finance, labor, etc. And all these risks are absolutely irrelevant, if you work with outsourcing company.

What are outsourcing weaknesses and how to deal with them?

First, security and confidentiality must be discussed with an outsourcer. Your NDA should clearly state what resources and what rights are given to each participant in the process. Trust everyone, but a competent contract excludes any possibility of unpleasant situations.

The second point - quality control. As we mentioned above, the competition in the market of IT-outsourcing is growing continuously, that is why companies simply can not afford to perform the obligations negligently. And again it’s better to provide the best possible complications than get rid of their consequences. Therefore, please, stipulate quality criteria.

The third moment that should take care in advance - transparency. Carefully considered work regulations gives you an understanding of how, at what time, what specialists, and what problems are solved. Agree, this approach leaves no doubt, and besides helps to avoid misunderstandings.

One step before the whole new level move

Thinking about the pitfalls, companies do not realize that in the face of modern IT-partner, they get access to relevant technologies of a qualitatively new level, which could hardly be implemented by their own.

A new level of service, minimizing costs, optimize of core business and the belief that your work will not fail – isn’t it the best deal? The answer for us is obvious. For you - definitely worth serious consideration. Make the right choice, allocate company resources wisely and let your success does not have to wait long!