Defining your outsourcing needs

The positive impact of internet has been largely felt by the business fraternity. In fact, with the introduction of internet, the definition of business development has gone for a permanent changeover. Unlike the past, today quality and quantity are not the only benchmarks for the growth and development of a business. Today visibility in the market is a bigger factor. Your brand should reach the global market. Your products should be visible everywhere. People across the world should recognize your brand. Today product promotion and campaigning are the most important criteria for achieving success in a business. And for successful prpoduct promotion and campaigning you need to improve your communication and interaction with people.

1) Define your core
Generally, the smart strategy is to hold on to operations or areas that define the core mission of your business. Then, consider outsourcing the other operations that are not as strategic.
If, for instance, your point of difference is customer service, make sure you have enough friendly and attentive full-time employees to make good on that. If, however, you promise rock bottom prices, then relying on an outsourcer, such as a Web-based virtual assistant, an automated phone system or an overseas call center, might make more sense.
Also, think through potentially outdated conventions about on-staff specialists, especially given the reach and effectiveness of today's desktop technology. Traditionally, small businesses have outsourced payroll and human resources services.
But owners can now tap outside facilitators for a much greater range of services. For instance, entrepreneurs with strong sales often assume they need a full-time bookkeeper to oversee the books. But, in fact, you can be running a $5 million company and still not really require a full-time bookkeeper. Such services have little to do with the volume of sales and more to do with the level of accounting activity, such as invoicing, bill paying, payroll and the like. Companies with a full-time bookkeeper can save about $30,000 a year by using outsourced bookkeeping services, say, a half-day a week.

2) Move slowly and commit incrementally
Outsourcing's advantages will vary with the services, the kind of business you run and, of course, the quality of your provider. It's worth your while to move slowly and commit little by little. Don't sign two-year contracts before testing performance and the relationship.
To get a feel for the process and to accustom your staff to the idea, first try outsourcing one stand-alone project, and then move on to hiring professionals for other areas or ongoing needs.
"With project professionals, there are no long-term contracts for unnecessary services and companies," says Chris Hagler, national director of strategic services for Resources Global Professional, a Costa-Mesa, Calif., concern that provides specialists and contingency experts in finance and accounting, information technology, human resources and legal services. "Project professionals are 'executers' as opposed to traditional consultants who do not necessarily roll up their sleeves and get the job done," he says.

3) Outsourcing dos and don'ts :
Try fixing whatever's not working on your own first. You may have internal resources that can work better than you think.
Carefully evaluate what really can be outsourced. Generally, projects that require team interaction or brainstorming don't work too well. Self-contained tasks or projects are more suited to outsourcing.
Consider management costs. Sometimes services look good on paper but you end up eating the savings in training and oversight costs.
Be prepared for challenges. It takes a while to build the relationship and synchronize the timing.
Don't walk in blind. Start with some paid consulting, if need be, so you can ask the right questions in choosing a vendor and keep knowledgeable tabs on performance.
If you outsource significant hunks of your operations, consider having a staff employee(s) to act as a liaison. You want to outsource functions but not accountability.
Watch out for hidden costs. These may include paying layoff-related expenses, overtime costs for remaining employees who may now have more work to do, and telecommunications costs for remote workers.

4) Know the outsourcing ABCs
Before you ramp up your outsourcing services, learn these outsourcing ABCs from Kevin Gregson, chief executive officer of Sherwood Solutions, a business advisory firm.
Alignment: Is outsourcing the right move for your business? Business case: Have you taken all costs into consideration? Culture: Can you bridge the cultural difference between your company and the outsourcer? Delivery: How will you define success?
It might take a bit of time to get right, but the benefits of outsourcing can be enormous. Check out your operation to see how it can work for you.

By: Joanna L. Krotz