One of the most common mistakes that business owners make, which puts their business at risk, is that they deprive themselves of the benefits of outsourcing. It’s no less than an unbeneficial obsession to think of doing and controlling every aspect of your business yourself. Your competitors aren’t doing that. Successful business owners know the secret recipe of running a successful business, and that is to do what you’re best at and outsource the rest.
For everything you either do not like to do or aren’t an expert at, there’s someone out there who is not only good at doing it but also enjoys doing it.
Outsourcing is a great way to leverage global talent. It is a practice wherein a company hires another company or individual/group of individuals to perform tasks that cannot be done internally. One of the most common reasons why businesses outsource certain business functions is so that they can focus more on their core business functions and streamline the more time-consuming processes in a better way.
With outsourcing, you not only improve your processes but also tap into global pools of talent. However, there are times when things can go wrong, and an outsourcing project can fail, especially if you’re initiating an offshore outsourcing strategy for the first time. For your offshore outsourcing strategy to be successful, here are the most important things to consider:
Defining the goals and objectives for your outsourcing strategy will give you a clear idea of what it is that you wish to achieve through it. This is an important criterion for making decisions and choices related to which outsourcing vendor to choose, which outsourcing model to finalize, and which business functions to outsource.
Go through your defined goals and objectives and ensure that you have set realistic expectations from them. This will ensure that your outsourcing strategy draws continued support and is successful in the long run.
Once you’ve ensured that your expectations with your defined goals and objectives are realistic, you also need to ensure that while reflecting upon the costs involved in the process, you do not miss out any related costs that might come as a surprise at a later stage. Some of the hidden costs you may want to take into consideration include the cost of selecting a suitable vendor, business process refinement cost, cost of attrition of existing staff, cost of cultural training, etc.
Maintaining a list of potential risks with offshore outsourcing beforehand will ensure that you are aware of things that might go wrong along the way. Try to prioritize all the risks and find out what their impact could be on your core business strategy.
Once you’ve laid down a list of all possible risks and things that could go wrong along the way, you need to regularly monitor these risks and have a mitigation plan in place to manage the risks and ensure they do not end up materializing into an actual threat to your business functions. Ensure that the plan is thorough, well-thought-out, and aggressive if required. It is also important to find out the probability and impact of each of the listed risk-type, as well as your ability to control it, and the effectiveness of each risk-mitigation strategy.
You need to objectively measure your benefits to find out whether they fell short of expectations or reflected extraordinary performance. In the case of the former, you will need to take corrective actions, and in the case of the latter, you will need to maintain the results. Also, don’t forget to recognize both the highs and lows in your outsourcing strategy to be able to optimize the benefits.
You not only need to choose an outsourcing model which has proven to be successful but also one that is the right fit for your company’s business model as well as the goals and objectives of the business. Each outsourcing model has its own set of weaknesses and strengths. Making the right choice is all about identifying what fits your business requirements and model well.
Why slow down your business by spending precious hours on secondary tasks when you could instead spend them on your core business activities that are primarily responsible for minting profits? The option of outsourcing business tasks is not new; it has existed for as long as any of the businesses. However, it has started becoming a more popular choice among big companies only since the last decade or so.
Companies primarily outsource tasks to cut their operating costs and get access to skilled expertise, which in turn helps to increase efficiency and streamline their overall business processes.
If you’re unable to gain a competitive edge in the market, a possible reason could be that you’re failing to realize how vital and beneficial outsourcing can be for your business to run smoothly.