Depending on the type of company, culture and products you have, there are a few things to consider when deciding to outsource.
Planning to do so may be a big step for your company, and while there are some situations where outsourcing is ideal, this may not be wise for every company.
Below are some situations that signal when outsourcing may be the wrong choice:
When your company is starting out
If you’re in the start-up phase, you, your partners and your staff should be focused on learning the ins and outs of the business. Outsourcing various tasks, like administrative and customer service can save you time and money. But you also want to make sure it does not create a barrier to getting to know how your company should be run.
Familiarity with your company’s systems and organization is crucial to identifying needs and planning strategically for the long term.
When outsourcing causes a loss of control
Even if your company has outsourced certain tasks, you are still ultimately responsible for monitoring progress and establishing efficiency of project completion. If in any instance, you cannot readily access projects and files during the outsourcing process, it’s a sign that you are losing control of the tasks you have outsourced.
When it puts a strain on your budget
Though outsourcing mostly cuts costs and saves money for the company, some jobs require highly skilled experts with high fees. If your company isn’t prepared to shell out a chunk of money for more costly outsourced services, training your staff to perform these functions may be a better option that’s more valuable in the long run.
Sometimes being too cheap in your outsourcing costs you more in the long run. You want to work with good, reputable vendors for outsourced work just like you want to hire good employees for internal work.
When security and confidentiality are threatened
If outsourcing various tasks or functions requires you to divulge valuable information that can leave your company vulnerable, you must protect yourself and your information before deciding to send your files over to your chosen provider. Setting down a clear contract that protects you from any security threats is a wise choice, but once security has been breached and information has been stolen, it can be difficult for your company to recover from the blow.
Be sure your outsourcing vendors take security seriously and that they have invested in sound systems to protect you and your company.
When you want to create a sense of community
Today, employees value a job that not only offers fair compensation, but also provides a good working environment and a sense of community. Companies that take this into consideration have lower employee turnover rates, as well as higher overall productivity.
Companies that strive for this want to keep their employees at their home base and as an integral part of the company, rather than just an extension. If this is a scenario you are working toward, you should consider this when deciding what to outsource. Outsourcing non-core tasks can help with internal camaraderie. But if all work is distributed and there is no physical place for your core team to gather, it may be difficult to attain that sense of community.
Outsourcing has its pros and cons depending on what is outsourced and the terms you set for your providers on the front end. Some tasks or functions are ideal for outsourcing to other companies or freelancers while some jobs are better kept closer to home. In any case, proper planning and collaboration can help you provide an optimal system that is a mix of outsourced and in-house efforts.