OUTSOURCING! Ow! Considered by many to be a BAD word. Bring up outsourcing to just about anyone and you’ll get an earful about how horrible it is that businesses outsource work—to other people, other cities, other states, other counties. They’ll talk about how work should be kept “in house” and local and how outsourced work is sub-par. If you’ve ever called a help number and ended up on the phone with someone that has English as a second language you absolutely know what I mean. It’s not fun.
But here’s the thing. You can just as easily call a local help line and have a bad experience even when the person on the phone speaks perfect English and is sitting two floors down from the CEO. You can receive a sub-par product that was made at a locally owned manufacturing facility. It’s not the concept of outsourcing that’s the real problem. It’s the execution and quality control.
Ineffective outsourcing can go wrong any number of ways including poor selection of resources, unclear and undefined expectations, and poor training. Yet these issues also exist within businesses that don’t outsource at all. You just blame the issues on something else. So let’s stop looking at outsourcing as negative and consider the value it brings to businesses, employees, and consumers.
When done correctly, outsourcing is an effective operational strategy. Outsourcing can save money and jobs when it’s done at the right time, for the right reasons, and the right way. For large businesses that rely heavily on call centers and help lines, properly executed outsourcing is a way to provide a high level of around the clock customer service at a considerable cost savings. For businesses that provide a product, outsourcing to a large manufacturing facility that specializes in the product and has access to an adequate labor pool can significantly decrease cost, improve quality, and increase speed-to-market.
Outsourcing can be critical for small and medium sized businesses. These businesses may not have the financial resources to fill all of the operational, human resource, and financial roles required to operate successfully. Without expertise in these key areas businesses can end up with issues that negatively impact revenue and growth such as high overhead, staff turnover, poor management, unhappy customers, and resource draining processes. Being able to outsource rather than hire full time staff can be the difference between keeping the doors open or closing the business.
Outsourcing can free up time allowing businesses to focus on higher level activities that drive growth, profitability, and innovation. It makes a great deal of sense to outsource tasks that can be successfully handled by others as part of their core business.
Ultimately, outsourcing to a strong partner can supplement internal efforts and improve results in essentially every key area bringing a higher level of success to businesses of any size. And isn’t that the goal?
“If you deprive yourself of outsourcing and your competitors do not, you're putting yourself out of business.” Lee Kuan Yew