10 Reasons to Outsource
This post is aimed specifically at the SMB enterprise and those consulting such enterprises. Recently in a post to this blog on February 3, 2008, I posted an article detailing a checklist for those enterprises that have already faced the questions on whether to outsource or not entitled Checklist Before Outsourcing Your IT. That article has attracted a large number of readers. In the article that follows I hope to aid those SMB’s that are still grappling with the decision on whether such a move is in their best interest. In my research I have found an article written by Rojo Sunsen entitled 10 Ways Outsourcing Can Help Grow Your Business. Sunsen succinctly defines outsourcing and then follows this definition with a rather direct and to the point list on the benefits to the enterprise. I have paraphrased Sunsen’s list below; however I highly recommend the complete article in order to gain the fuller picture and what such a move can do to grow your business.
1. Employee training is reduced and allows such time to be directed to the company’s core competencies.
2. Capital outlays for equipment and software are reduced and can be placed into more revenue generating endeavors.
3. Save on the expenditure of employee recruitment to fill positions for intra-company administrative functions.
4. Hand-in hand with point #3 above is the time that is saved performing certain administrative tasks that are ancillary to the enterprises core functions.
5. Yet another savings to points #3 and #4 above are the employee benefits costs that are no longer required such as “taxes, medical, vacation time, holidays, worker’s comp., unemployment costs, etc.”
6. Office space opens up which could be better used performing the tasks required on the revenue side of the business; or alternatively, space could be sublet or a company’s leasing requirements can be reduced.
7. Order processing and delivery of products or services can be enhanced thus creating better customer satisfaction which can result in future return business.
8. More emphasis can be placed on increasing market share with the abovementioned improvements and savings.
9. In line with point #8 above is the ability to accept larger orders or take on more orders due to the economies of scale which should come about due to the outsourcing.
10. Lastly, your outsourcer can become a valuable ally in your marketing efforts and provide an additional outlet and/or network of customers.
Implicit in the above savings tips is the ability to redirect funds usually budgeted for the administrative side of the business and put these monies to better use on the revenue generating side of the P&L.
