Around a third of UK businesses say they plan to outsource more by the end of the year.
Outsourcing can be a hugely beneficial strategy for any business.
It can bring specific expertise into your business without the long-term costs of hiring in-house.
It can add additional resources to your business for a specific period.
And it can help your business grow much quicker.
If you get it right.
As much as it can be a benefit, outsourcing can be a disaster if it goes wrong.
It could be bringing in the wrong provider.
Not doing enough research into what you should expect from outsourcing.
Or, as is often the case, outsourcing the wrong parts of your business.
In this article, Andy MacGregor, Managing Director at outsourced telephone answering service provider Face For Business outlines the key things to consider to ensure you make a success of outsourcing.
Deciding what to outsource
Outsourcing isn’t a case of picking parts of your business you can’t really be bothered dealing with and offloading them to a service provider.
It’s a strategic process with the goal of improving your business in some way.
One recommendation to keep in mind is that you shouldn’t outsource your primary service or a core competency, as this is what you should be focussing on.
Instead, is there a part of your business where you don’t have expertise in-house, but which could greatly improve your business with the right investment?
Marketing is a prime example of an outsourced service in many businesses.
Rather than hiring an in-house marketing team, it’s common for businesses to outsource this service to an agency instead, which gives them access to a range of experts for a much reduced cost.
Or, it could be that a specific function within marketing is outsourced, like content writing or PPC based on needs at a given time.
What business processes do you have, and how will outsourcing change this?
If you understand your business’ processes and how they operate – and to what level – it will help you figure out which functions or services you might need to outsource in order to improve them.
Doing this research can also help you prioritise your outsourcing budget if you need to outsource more than one function.
Finance and accounting is a common process businesses outsource.
Either they don’t have the skills in-house, nor the need to hire a full-time accountant role because they only need the expertise at a certain time of the year.
You should look beyond the broader functions or the more obvious parts of your business and get into the detail of your processes.
Within customer service for example, is there a particular function that’s letting you down that could quickly improve your net promoter scores?
Telephone answering is an often overlooked part of a business that could be outsourced, but it makes sense that it should be.
It’s cheaper than hiring a full-time receptionist, you can scale the service up and down based on need, it can free employees up to focus on their work rather than getting caught on a sales call, and it makes sure you never miss a call again.
What’s the supplier market like?
Deciding you want to outsource, and finding the functions you want to outsource is one thing, but you need to carefully research the supplier market to ensure you can find the right level of expertise.
Remember, you’re outsourcing the function to bring in reliable experts who can help you.
If the supplier market is lacking, think carefully about whether this is the right function to outsource now, or if there’s another way to go.
When looking for a supplier, try and get recommendations from your network, or be sure to check testimonials or case studies of the companies you’re thinking about bringing in.
You should also think carefully about the level of outsourced service you need.
For example, do you need an entire function to be outsourced all the time, or do you just need some temporary resource?
Consider the cost implications
Measuring ROI of an outsourced service can be easy or difficult depending on the type of function you’ve chosen to outsource.
For something like marketing, it’s relatively straightforward to measure ROI because you can easily identify results by measuring changes in web views, leads, sales or brand growth.
Other functions are harder to measure.
Something to consider is the cost of outsourcing compared to the cost of hiring in-house, and the resulting financial impact the investment has.
Using telephone answering as the example again, if a full-time receptionist costs £30,000 a year as a base salary, you’d have to make at least £30,000 in additional revenue for that to be worth the investment.
But if you could do it more cost effectively, like by hiring an outsourced provider who only charges for the time they spend on the phone, the initial investment is much lower, so it’ll be easier to get the investment back.
What would happen if you didn’t outsource, and did nothing?
As a final test of whether outsourcing is the right decision for your business, look closely at what would happen if you decided to keep going as you are now.
Is it a bigger risk to struggle through or try and manage resources in house than it would be to bring in outside help?
What would the financial outcome be if the processes you need help with went unchecked for longer, and how would that impact your ability to grow your business?
Outsource the right functions to increase success
Ultimately, outsourcing is a highly effective means of achieving business growth if you take the time to do the research to uncover the right areas you need help with and then choose the right outsources supplier.
By taking the time to do it properly, outsourcing can set your business up for success in the long-run, regardless of what challenges you face.