5 signs you are ready to outsource

Large companies have been outsourcing business and IT functions for quite some time but small and medium sized companies have been much slower to embrace the opportunities and benefits that outsourcing can bring. It’s not just the classic business or IT functions like payroll or call-centers that have been ripe for quite some time but the newer software as a service (SaaS) functions for things like expense reporting, CRM and ERP functionality in addition to things like network management, HR and even virtual assistants.

Typically the refrain against outsourcing begins with the classic excuse, “outsourcing is great but…we just aren’t ready” or the ever-popular “We’d love to outsource that function, but it just wouldn’t work here.” Another classic excuse is “Our people don’t want to have to call a foreign country to get help” – a statement that confuses location with function because companies outsource domestically all the time and will continue to do so.

You'd be surprised at what you can outsource and where these days.

You'd be surprised at what you can outsource and where these days.

So ready or not if you and your company are experiencing any of these symptoms – you are ready to outsource.  How you go about outsourcing is something else all together, but if you look down this list and see two or more of these symptoms you owe it to your company and the shareholders to begin the outsourcing process.

1. Firefighting. If you and your staff are spending all of your time lurching from one crisis to another with a permanent backlog of help-desk cases doing nothing but putting out fires, then you aren’t ready to take on the new challenges the business is facing and are in serious danger of being dismissed as irrelevant and ineffective at best. IT staffs and IT teams have never lacked for work and never will. The relentless march of technology ensures there is always a new technology to be mastered, requests by departments and users for new gadgets to be installed and the ever-present software  patches needing deployment. But if your department is only servicing requests from other departments, how are you adding value to the business? And in a time where no stone is unturned in looking for ways to cut costs while improving performance if you aren’t adding value to the organization, then you probably won’t be with the organization for long.

A Sourcingmag.comsurvey shows many of the reasons businesses choose to outsource

A Sourcingmag.com survey shows many of the reasons why businesses choose to outsource

2. Expertise shortage (or worse a surplus).  If your business is like most businesses you don’t have all the skills you need for the projects on your plate. It’s not that your people aren’t talented, hard-working, top-performers, it’s just that they’ve never needed to do a Pivotal  migration. And they’ll only have to do it one time anyway. It’s not that they can’t do it but do you have the time it takes for them to make the usual mistakes while they learn? The same is true for other areas of your business. It’s not that you can’t bring in consultants to accomplish the tasks and train your staff but why spend the time and resources developing those internal skills in the first place especially for one-time or commodity activities. Sure developing staff is a key way to build leadership internally but make sure when you add skill sets internally it’s helping the business for the long-term and not just reacting to the flavor of the year.

3. Skills mismatch. The skills necessary to effectively architect a network aren’t the same ones needed for deployment of the network. Nor are those the skills needed for management and maintenance of a network infrastructure . Architects typically come of up with a great idea and move on – rarely are talented network achitects kept busy in house – there just isn’t enough work that’s interesting for them – especially if you are in a small or medium business. Sure there are exceptions but typically most business with under 10,000 aren’t making enough changes to keep a skilled architect busy. The days of being an IT generalist are coming to an end if they aren’t already over. Simply put it just isn’t possible to be effective expert in all the technologies a business uses today. The only way to be a Cisco expert is to specialize in Cisco equipment, same is true of Messaging, Active Directory, VPN authentications, AS/400 databases, Security Architecture, SAP, Oracle, etc. It’s not that you can’t know something about all of those things but the likelihood that you can maintain your knowledge and keep current in all of those specialties is very low because there simply aren’t enough hours in the day.

4. Hiring freezes. In a time of hiring freezes and forced attrition important projects are getting post-poned preventing businesses from accomplishing key objectives. Outsourcing can be effective way to accomplish those business objectives without growing the size of your staff or company. Sure there are costs associated with outsourcing a project but if the project is truly critical to the business then the ROI to the company will be clear even with the cost of outsourcing. Does this mean that you can outsource everything? Absolutely not, but it does mean that the most important projects to your business can be greenlighted and accomplished. And isn’t it a lot more fun coming to work to every day knowing you are helping the business and not just treading water?

5. Cost Cutting. Cliched but true. In a time of cutting costs it may the best way for your organization to save money while maintaining flexbility. Sure you might be able to save money now but just reducing staff. But that burdens your remaining staff with a higher workload setting the stage for a staffing shortage when business eventually turns aound, and it always does. While you might not save as much money outsourcing a function as you would by just elimanating staff you’ll gain the capability to  expand or contract the outsourcing relationship as your business needs change. Outsourcing gives you the possibility to expand by just a little bit with an outsourcer, something you just can’t do if you need to hire another person. Alternatively if your business shrinks by 10%, you can adjust your outsourcing needs accordingly saving money.

There are many more reasons a business should consider outsourcing but these five a quick, simple rule-of-thumb. What are your experiences with outsourcing, both good and bad? -t


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