When Should You Outsource Your Business Processes?

The first major step your company should take in deciding what services to retain and which to outsource begins with an honest assessment of your unique strengths and weaknesses. Seems simple right?

As much as we would all like to think, it is difficult for us to praise ourselves and even harder to admit our weaknesses. Think back to when you were asked what your strengths and weaknesses are in your job interview. Which was easier to answer? Probably the strengths, although our weaknesses are often more apparent to us than our strengths.

As a company, you have a core fundamental purpose, what we would call your “why.” Every other operation exists to accomplish this purpose. Before embarking on a journey to choose what to outsource, focus on your “why” and then begin unashamedly identifying your weaknesses and strengths. Your strongest services and operations should be kept in-house. Your most difficult weaknesses should be up for potential outsourcing.

Five Reasons You Should Outsource

Here are five reasons outsourcing could benefit your business:

• You Can Control Costs
• Outsourcing Leads to Innovation
• Outsourcing Enables Better Decision Making
• Outsourcing Allows Global Talent Acquisition
• Outsourcing Helps You Stay Flexible

You Can Control Costs

One of the greatest reasons for outsourcing is the bottom line, literally. Outsourcing can save your company significant money versus tackling the issue, service, or operation in-house. There are two closely related core business areas that most often become outsourced and tend to be less cost-effective when done in-house: IT services and Customer Experience.

IT work and customer experience services go hand-in-hand because, in the 21st Century, the digital age dominates the experience and interaction with your business. Customers expect businesses of all sizes to have digital platforms that are enjoyable to experience, comprehensive, and modern. These expectations can be very costly to satisfy.

Aside from equipment expenses, IT professionals do not come cheap, rightfully so, and software development, website management, and digital hosting services are equally as expensive. Attempting to build this type of system from the ground up will be far more costly than most companies expect at first.

Outsourcing these services to an outsourcing company specializing in customer experiences can be a fraction of the labor cost of trying to accomplish it alone. Moreover, outsourcing often yields a better result.

While your business would be starting fresh, an outsourcingprovider will have the experience and infrastructure to accomplish it digitally and analytically. This is just one example but is often one of the most common outsourced services and one from which your company will benefit tremendously.

Outsourcing Leads to Innovation

We discussed earlier that it is important to identify your strengths and weaknesses before embarking on a journey towards outsourcing. This is an important step in redefining or recognizing your company's “why.” There is a tremendous value in bringing your team back into focus on what fuels your company's purpose. This is the path that leads to innovation.

Focusing on your core purpose without the weight and struggles caused by your company's weaknesses affords you more time to be productive and creative. Combine these, and you're left with great opportunities for success. Speaking of success, as ironic as it may be, success is why you are in the position of needing to outsource.

When your success outgrows your capacity to fulfill demand, your success can stall, or worse, reverse course. When you have outgrown your capabilities, issues with your product will arise, such as defects, poor craftsmanship, missed fulfillments, and low morale.

Unfortunately, these are counterproductive to success, and your customers will eventually lose patience. The very reason you attained success will be why you lose your grip on it.

To gain access to a competitive advantage in the 21st Century, you must remain vigilant in your pursuit of innovation. Consumers want to do business with companies that do not settle or become complacent.

They want to do business with companies that promote success within their organization and in their community, and around the world. This is the life force behind many successful, creative startups and small businesses. Innovation can only occur when space is given for it to grow and prosper.

Outsourcing Enables Better Decision Making

St. Augustine defined prudence as knowing what should be sought after and what should be avoided. In other words, having good prudence is having the wisdom to pursue what is right and good and avoid what is not. How does this relate to outsourcing? We are glad you asked!

Outsourcing an area of your company that you struggle with affords you an opportunity to exercise good prudence with the direction of your company and the products you deliver. Maybe you are a custom frame company, and you are known for the unique artistic expression that goes into your designs and work.

While designing your frames may be your strong suit, fulfilling your shipments on time and answering customer questions may not be. The stress of this weakness may impact your creativity and stall your success.

Prudence is required constantly for a company to be successful. You need good prudence when making financial decisions, creative decisions, and growth decisions, to name a few.

Suppose you are so bogged down mentally and financially with a problem inside your company. In that case, you are not likely to have space to make prudent decisions. Use prudence in deciding what to outsource and what to retain so that you can have the ability to use good prudence throughout your company's future.

Outsourcing Allows Global Talent Acquisition

Location, location, location. It is an important element across various topics, from real estate and economic development to vacationing and talent resources.

Here's an example. The Research Triangle in North Carolina makes up an area that includes Chapel Hill, Raleigh, Durham, and Wake Forest. What do all of these cities and towns have in common?

All are home to major world-renowned universities for their various unique research concentrations. NC State with its agricultural research, UNC-Chapel Hill with its medical research, and Duke University with its legal research.

Companies like Pfizer have placed major research centers and manufacturing in the Research Triangle to tap into the young professionals graduating from these institutions of higher learning.

Another example is Silicon Valley in California, where companies like Apple and Google are headquartered to have geographical access to the leading experts in technological advancement, innovation, and invention.

Location matters. One of the greatest benefits of outsourcing lies in the beauty of eliminating the restrictions that your location imposes by gaining access to a network of global talent.

The remote work revolution has led more and more companies to move their operations to a more digital and remote format. This allows a company to recruit and hire someone who lives in Tokyo to work for a company based in Monks Corner, South Carolina.

Ever heard of Monks Corner? With offshoring and access to global talent, this becomes irrelevant. Geography no longer matters when you partner with a company that can access talent from any time zone in the world to accomplish your goals with outsourcing.

Outsourcing Helps You Stay Flexible

The fifth benefit of outsourcing we want to discuss with you is lesser-known. Outsourcing certain components or areas of your business operations that may be cyclical in nature affords you extreme flexibility.

Say, for instance, that you have a high demand for a certain resource during the summer months but not in the winter months of the year. By partnering with an outside company, you can retain their services during the peak points of the year and then release them during the off-peak points when the demand is manageable.

Without outsourcing, this flexibility would be non-existent. Without flexibility, you are faced with difficult decisions that can lead to productivity issues. You may decide that you need to hire a temporary workforce during your peak production times, but that presents several problems and challenges. The first and foremost is that these workers typically do not become engrained with your company culture. Moreover, their workflow and the quality of their work will not rival that of full-time employees.

In other words, they will not be committed to your company's mission. Most workers want longevity, work security, benefits, and consistency. If all you have to offer is temporary work, good employees will look elsewhere.

What's more, most temporary workers only maintain this type of employment until they find stable and permanent jobs. The result means you will have a constantly rotating door of new employees who need to be trained year after year. Outsourcing this need mitigates this issue.

Outsourcing Is the Smart Choice

This is by no means a comprehensive list of how outsourcing can benefit your business and its fundamental goals. Still, we think that you would agree they definitely demonstrate why the concept of outsourcing is not as negative as you may have once thought.

We understand why you may be apprehensive about letting go of control of different aspects of your business process. However, the truth is that you aren't losing control; you are sharing control.

At the end of the day, your business is still your business. Even though you may be sharing control with a partner, you still have the option to eliminate your weaknesses and transform them into strengths as your continue to grow.

At Awesome CX, we specialize in partnering with businesses like yours to enhance the customer experience. Our core mission is to honor your core mission. We want to be an extension of your business model, not separate and apart from it.

We recognize your fears and concerns with outsourcing. We make it our priority to become partners on your mission, not bystanders. Contact us to discover how we can elevate your customer's satisfaction and experience with your business.

Sources:

279. Van Riel (2010), "Augustine on Prudence," Augustinian Studies, 41, 255-279.

The Triangle

Top Outsourcing Advantages | The Balance