It is becoming easier and easier to outsource some, most, or all, of the everyday business needs. \u00a0These requirements may be IT, HR, accounting, marketing or almost any other part of business. \u00a0Outsourcing is becoming an attractive option as there are a lot of positives that can come from outsourcing. \u00a0However, there are also big negatives that can come from it. \u00a0The key to outsourcing, just as any other business activity, is to do due diligence first. \u00a0Let’s look at some dos and<\/p>\n
The key to outsourcing, just as any other business activity, is to do due diligence first. \u00a0Let’s look at some dos and do not’s\u00a0when measuring whether to outsource a function.<\/p>\n
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I have come across a lot of companies that outsource a function to cut costs or avoid headaches. \u00a0The function is not a core part of the business, but one just required as part of existing. \u00a0Avoiding pain points is a good reason to outsource. \u00a0Unfortunately, it still requires some consideration and planning. \u00a0Outsourcing is never as simple as \u201cthrowing it over the wall\u201d for a vendor to handle. \u00a0In all cases, the details need to be nailed down.<\/p>\n
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The details entail what will be outsourced and how the outsourced processes will flow. \u00a0These should include interaction with in-house staff and procedures. \u00a0Along these lines, a lot of vendors will work with their customers to help integrate the outsourced service into a company\u2019s processes. \u00a0Transition support is a great offering to take advantage of, but there can be some cost associated with doing so.<\/p>\n
When you lay out the details of what to outsource (and the required integration points and processes), it provides an excellent starting point for both a SOW and related SLAs. \u00a0These are critical deliverables to have when you want to evaluate the performance of a vendor. \u00a0Vendors rarely have in-depth knowledge of your business. \u00a0Thus providers require explanation and details at a level that is not needed for in-house staff.<\/p>\n
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One of the most painful things I have gone through in business is extracting processes and data from a vendor. \u00a0The extraction is typically done to bring things back in-house. \u00a0Outsourcing always seems so simple. \u00a0Unfortunately, \u00a0if you aren\u2019t putting pieces in place to be able to switch vendors or bring a function back in-house you are asking for trouble.<\/p>\n
You should always be able to answer the question: \u201cWhat happens when the vendor fails or disappears?\u201d \u00a0Vendors offer great deals to help a company outsource their functions. \u00a0However, the vendor is rarely going to provide help to change to another provider. \u00a0Even when transition help is offered, it tends to be minimal.<\/p>\n
This lock-in can lead to solutions like the old Roach Motel advertisement (or the line in the Eagle\u2019s, “Hotel California”) where you can check in, but you can never leave. \u00a0The new vendor will often help make the transition in that case. \u00a0However, if you are bringing things back, in-house there is no one to help. \u00a0Make sure the plan does not require support from the vendor (if possible), just to be safe.<\/p>\n
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A metric must be available to measure anything, so a process that does not have a metric will never be measurable. \u00a0Metrics are important when outsourcing. \u00a0Without them, you end up with a vendor that is responsible for telling you how they are doing. \u00a0How often do you think a vendor is going to say they have been letting you down and you should find another provider?<\/p>\n
This is a typical situation I have seen when an entire function is outsourced. \u00a0HR and benefits tend to be so visible to employees that it is not often an area of concern. \u00a0In this case, the vendor can be in a sort of monopoly position. \u00a0Metrics and feedback are readily available.<\/p>\n
However other areas, IT, for example, tend to be run by a supplier with almost no real measurement from the customer. \u00a0Large vendors even take advantage of this at times where they bill junior resources and use the\u00a0client as a sort of training ground for those junior resources. \u00a0This bait-and-switch is exactly why third party audits can be highly beneficial to a company. \u00a0It helps avoid the case where the fox is watching the chicken house.<\/p>\n
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There is much more to consider when looking at outsourcing and we will return to this topic in the future to dig a little deeper. \u00a0For now, you can always send an email to info@54.197.223.3\u00a0or contact us on our website. \u00a0We are happy to help you with any specific questions or to schedule a consultation call or IT audit.<\/p>\n","protected":false},"excerpt":{"rendered":"
It is becoming easier and easier to outsource some, most, or all, of the everyday business needs. \u00a0These requirements may be IT, HR, accounting, marketing or almost any other part of business. \u00a0Outsourcing is becoming an attractive option as there are a lot of positives that can come from outsourcing. \u00a0However, there are also big […]<\/p>\n","protected":false},"author":1,"featured_media":40,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[4,3],"class_list":["post-13","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-consulting-strategies","tag-best-practices","tag-outsourcing"],"yoast_head":"\n