What You Can Outsource – A Guide

Considering Outsourcing? – Here’s a guide for project managers and business leaders

Outsourcing provides opportunities to increase quality, save money and expand the expertise being applied to your business, or help you more effectively deliver your project. This is why it’s an expanding industry providing a wide array of services to small and large businesses. However, it’s not without its problems, the first of which is people outsource the wrong things. Here’s a guide of critical factors to consider when looking at outsourcing as a business solution.

1. Consider items not central to the value you provide. Your business or project uniqueness – why customers choose you versus another provider – is something you should hold and nurture. Having full control of these elements is critical to sustain and deliver value. Outsource items that take time and energy, and don’t impact your core capabilities. Examples include bookkeeping and tax preparation, HR and payroll processing, or managing some or all aspects of your information technology.
2. Understand the impact to business processes. Outsourcing an entire business process can be easier than just a portion, so you can avoid integrating your processes with the outsourcer’s. For example, for a small business, you may want to consider outsourcing both bookkeeping and tax preparation. That way, aligning the way your books are organized to feed your tax data collection can be handled by the outsourcer. This avoids the need to integrate your internal bookkeeping and cost categorization processes to support your tax preparer’s processes.
3. Look at the data. While critical data is often held and managed by outsourcers, consider the implications of having this vital resource outside of your direct control. Based on the industry you are working in, this can be problematic, as conforming with regulations for where data is housed, or how it is stored, secured, and transmitted, can increase outsourcing costs. Outsourcers can manage data, even highly regulated data. But be certain you understand what needs to be done to manage your data appropriately and compare those needs to the capabilities and experience of your potential outsourcer.
4. How might your business change? To respond to an evolving marketplace, you may be contemplating changes to the products, services or approaches you take to deliver value to your customers. When you consider outsourcing, keep those potential changes in mind, as they may affect the services you require from your outsourcer, or the approach the outsourcer needs to take to satisfy your requirements. It might be prudent to hold off on outsourcing until you make the business changes you have in mind.

Deciding to outsource is not a trivial exercise. Considering these points, and other aspects unique to your business situation is a best practice when looking at outsourcing to improve your business or project results.

For more tips about outsourcing, check out my outsourcing courses available on LinkedIn Learning. The first in a series of courses, Outsourcing Fundamentals, can be viewed at https://www.linkedin.com/learning/outsourcing-fundamentals/common-outsourced-services-2?u=2125562