Recently outsourcing has been gaining popularity as a way to enable a company’s growth without tying up resources and personnel with new tasks. Suppose you want to add a service to your company but are afraid of the costs of expanding in-house. It is a good idea to see if there is another organization ideally suited for the project. Some forms of outsourcing have been around for a long time. Burger places get their buns made somewhere else for example, hotels send out their laundry. The difference with modern outsourcing is that company B often works as company A for company A’s customers. But the customer is usually unaware of it. It may seem slightly deceptive, but it is a very intelligent way to do business when done right.
Advantages:
The main advantage of outsourcing is that it saves money. Let’s say that company A needs to supply IT support for its customer base, and suppose company B already has the infrastructure to provide that service. In that case, it is cheaper to hire company B to provide that service rather than create a new IT support department. Another advantage is that company A can continue to focus on its strength without diluting its talent to deal with a new service. A third advantage is that the risks are significantly reduced and shared between A and B by outsourcing.
Disadvantages:
One of the concerns about outsourcing is that your customers will be using the service of company B, but it will be done in the name of company A. Whatever experience they have will reflect on company A. However, A will have very little control over the standards and procedures of B. Whatever mistakes occur, theybecome the problem of A. Another common concern is differences between company standards. Sometimes even different terminology can be used, which can cause frustration for the customer. The third problem is that by outsourcing, the employees of company A might become redundant and lose their jobs or be relocated. And whenever another company is involved, security issues will always be a concern, especially with customer data.
How to Outsource Successfully:
The key to successful outsourcing is communication. Company A must do everything it can to ensure that the customer experience continues at the same standard. There must be clear agreements about goals and expectations for the service, and the company must have some oversight and a review process to ensure quality control. It would be good if company A provided access to executive support as well. There should also be financial and production milestones to be met. Company A can be proactive by being highly selective in choosing an outsourcing service partner.
The growth of outsourced services proves that it is a model that can be used to great success when managed properly. In a way, it is like a new form of the assembly line, where a company can add products to its profile by adding a new partner, like a new piece of machinery. But it is a process that requires additional levels of management and tight protocols. With the right approach, outsourcing has proven to be an excellent method for rapid expansion.
