Outsource Your Business

The Outsourcing Debate

Many companies outsource some of their business processes; it could be to save money, and/or to concentrate on their core business objectives.

To achieve this, companies tend to look for strategic alliances with a third party that can provide a skill set that they do not possess. This could add benefits such as reduced overheads, more adaptable staffing arrangements and increased productivity.

Of course, you would need to weigh up the pros and cons of outsourcing; these are some of the questions that need to be asked if you are contemplating outsourcing any of your business processes.

1. Do you currently have the expertise?

2. What improvements will be made?

3. What impact on quality will there be?

4. What is the cost saving?

5. Have you conducted a risk assessment?

6. How much control will you still have (and what will you lose)?

7. What communication issues does this bring? (e.g., external access to internal systems)

8. How will this impact on the company’s culture?

Research suggests these are some of the pros and cons of outsourcing—

Pros

1. Cheaper labour

2. Lower operating costs

3. Lower training costs

4. Access to better technology

5. Increased productivity

6. More focus on the core business

Cons

1. Employees can feel threatened

2. Possible loss of control

3. Potential to lose customers

4. Threat to data security

5. Lower quality of work

Some of a company’s operations that may be considered for outsourcing can include—

• Workforce development;

• Human resources;

• Training;

• Marketing;

• Billing and accounting;

• Information technology; and

• Web development (and content management).

Even some of the above could be partially outsourced. Take the accounting aspect of the business, there is the client facing side and the administration and compliance component. You could outsource the compliance element to a third party that focuses only on this and your company could concentrate on the business to client side.

Workforce development maybe another area that could be outsourced, at least part of it; typically, this would be training. Even that may only be partly outsourced; first aid would be a classic as most companies do not have the expertise to train their employees in first aid.

Aspects of workforce development you could consider outsourcing are—

• the education, training and development of knowledge and skills of employees;

- this can include areas such as in a high-risk work category, or 
- outsource to a registered training organisation

• support systems and mechanisms;

- recruitment of staff
- resources

• training management; and

• talent management.

The images in this graphic are from unknown authors licensed under CC BY and CC BY-SA respectively