Small businesses are struggling.
Business owners don’t take vacations because they are scared to death their business will fall apart.
Budgets are shrinking with growing competition.
This is quite possibly something that you are experiencing or you have experienced.
You need transformation and your organization needs to transform too.
Outsourcing can provide an extraordinary opportunity to reduce your operational costs.
You don’t need to employ staff to complete these undertakings
According to Michael F Corbett outsourcing is not just a way to reduce costs; it is an essential element for business excellence.
Before you start to define the outsourcing process with functions, you need to define your company’s core competencies.
How do you identify your company’s core competency?
Defining your company’s core competencies will help you define your business goals. This will allow you to determine what to outsource and what not to outsource and key outsourcing considerations.
To assist you in removing the guesswork and set the right goals for your outsourcing decision, here’s a free goal-setting template.
Outsourcing can have a significant impact on your bottom line.
It can reduce costs, bring expertise to your business, and foster innovation and other vital tasks.
But there are risks, too.
You could lose control of proprietary information, or end up with products or services that don’t meet your company’s quality standards.
Are you sure that you are making the right decision?
Don’t stop there.
You should look at using the Outsourcing Decision Matrix to identify which tasks or processes you should keep in-house, and which you can safely outsource.
The two most important questions are:
Does the task in question give your business a competitive advantage?
How much does the task contribute to the smooth running of your organization? And how much disruption does it cause if it’s done badly?
Form a strategic alliance is a high complexity, low importance quadrant. It can be outsourced to a trusted partner easily.
Retain is a high complexity, high importance quadrant. Retain these tasks in-house.
Outsource is a low complexity, high importance quadrant. These can be outsourced with little risks.
Eliminate is a low complexity, low importance quadrant. Think about eliminating these tasks completely.
Now you know.
What are you great at?
What do you lack?
Here’s an example for the list to give you some direction so you can create your own.
This is time consuming.
It will give you a clear road map of where you are, where you want to be, and what’s holding you back.
No business has ever taken off based on ideas alone.
It is execution that transforms an idea into a legitimate, revenue-generating business.
You want to find a company that is capable of accomplishing things instead of just spouting off ideas.
It is imperative that you have team members with the agility and ability to deal with problems quickly and efficiently.
With the competitive nature of business, you also need people who are resourceful.
The ability to innovate and to come up with creative solutions is a critical asset.
Many entrepreneurs wait until things go wrong, then scramble to get people to fix it.
Think about the potential challenges from the outset, and build a team that can handle whatever comes their way.
If you want to be successful, you need to carefully consider who you work with.
It can be quite a challenge to determine who’s right and who’s not.
You need talented people that can get the job done, but you also want them to fit your culture.
To effectively use them, keep these tips in mind:
The key is: always keep alternatives.
You should make a list of vendors.
Where to find them?
Here are some ways.
What to ask them?
Here are some questions.
Ray Carter, director of DPSS Consultants, first outlined his Seven Cs of Supplier Evaluation in a 1995 article in “Purchasing and Supply Management.” He later added three new Cs to the model.
Used as a checklist, the 10 Cs model can help you evaluate potential suppliers in several ways.
Next is request for sample of work.
Prepare an Request for proposal and analyze them.
Compare, choose and shortlist the robust, well funded outsourcer.
More than half of outsourcing clients fail to fully utilize analytics to effectively track and measure success.
Remember… without data, it’s just an opinion.
According to Foresters Services Survey, Q3 2011 more than 50% of the biggest challenges to the clients is due to the vendors lacking business process expertise and culture fit.
You need to develop metrics before starting the vendor selection process.
Metrics are measure of output or results.
Most important metrics for measuring the success is:
The final step — calculate the return on investment of outsourcing.
It is essential that every effort be made to calculate the return on investment and to periodically measure whether your stated goal for outsourcing is met.
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