Why Companies Should Consider Outsourcing Key Services
Posted on March 31, 2020 by Mark Johnson
For small businesses and business owners their first reaction is to try to do all things themselves or with a trusted group of employees (some of whom may be family members). There is a natural reaction to the question of outsourcing which draws the following responses from business owners:
- Outsourcing is too expensive.
- How can anyone who is not part of the business know what I know about my operation?
- I will lose control over the process and must rely on others who have different priorities.
- How will I know how to choose a particular service for outsourcing?
Let’s answer each of these questions and I want you to see that in many situations outsourcing can be an excellent solution.
Outsourcing can be economical in many circumstances. If the service allows you the opportunity to decide when and how much time you will pay for then the cost of outsourcing can be managed to only those times when the service is needed. As an example a business can save significant costs by paying for managed IT services (an outsourced help desk) rather than hiring a full-time employee as a network administrator.
Outsourcing services can often allow the business to focus on their core competencies rather than deal with the complex payroll rules to pay employees on a biweekly basis. The key here is to outsource those functions that are not core competencies allowing the business owner the time to focus where they have expertise.
While outsourcing does require the owner to relinquish a level of control this issue can be largely mitigated by effectively managing outcomes as you would with any vendor. The competitive process and investing time to research the best services for your business will go a long way in minimizing the loss of control.
Choose services on recommendations you trust and leave options in the agreement for you to replace the service if the performance is subpar. Limit your contact period to one year or less when taking on a new service. Have a clause that allows cancellation of the contract with a 30 day notice.
Outsourced services can be an asset as shown and keep in mind that an outsourced service will have experiences from a variety of business situations and can be more objective with any advice they impart.
Good examples of outsourced services include:
- Human Resources
- Web Development
- Network Support
Finally, there is an excellent blog on this topic by Ed Garay who owns a high successful managed services company in Chandler, AZ Catalyst Computer Technologies. CCT was the Chandler Small Business of the Year. He provides an IT solution for small and mid-sized business needing IT support for backup, help desk and network support. The link to Ed’s blog is shown below: