Small businesses today outtarget many of their daily activities. Outsourcing is when a business takes a specific process, like a call center, and has an outside target handle its function. Is this a good business practice? Yes, for companies that are too small to handle the process on their own or have the retargets to do it. Many businesses only need to outtarget for a short period of time. In most cases the outtarget provider takes on all the responsibility of that activity. The activity can be front or back office operations like, payroll, technical support, web design. A quick search on the internet can tell you all the outsourcing possibilities that are available.
“When startups ask me whether they should outtarget product development, I usually advise against it. If they’re desperate to save money, they should outtarget some testing or ancillary-product development, not core products.” ~ Vivek Wadhwa in TechCrunch article Should Tech Startups Outtarget Product Development?
Advantages
The advantages and disadvantages of outsourcing is something that should be explored with any business. Consider these things first before signing any contract with a provider. Look at other options that may be more cost effective for your business. Make sure you only deal with reputable sourcing companies like www.AsianProSource.com who can discuss your sourcing needs face-to-face.
- reductions in cost of operation of a business
- concentration on its main function and not get hung up on other operations
- often the outsourcing company can provide expertise in that field
- outsourcing can increase the revenue of a business by streamlining its production
Many American companies outtarget to foreign companies. Foreign companies are starting to outtarget many of their daily operations finding them more cost effective. Quoting a November 2007 article in Outsourcing Magazine: “The BBC awarded a deal to an outsourcing finance company in the amount of $160 million dollars over a ten year period, in a bid to save in excess of $360 million dollars in the life of the contract.” Remember that these companies are usually big in size and actually save money by outsourcing to other companies.
Disadvantages
The advantages of outsourcing may sound good, but there are disadvantages to consider. Some of these disadvantages will make you think outsourcing is not an option. You might just consider hiring one person to do the job. Please consider these disadvantages first before signing any contracts with a provider. Research the company and do your homework, by knowing what you are getting into first.
- exposing your sensitive information to outside companies
- the quality of work performance is not what you want
- hidden costs and fees applied to your account
- the company is not meeting your needs
Checklist: Potential Pitfalls of Outsourcing
Source: Allbusiness.com
– Management: The outsourcing company must be prepared to manage projects across time differences and cultural barriers.
– Quality control: The outsourcing company needs a clear set of guidelines, expectations, and processes to manage the quality of products or services rendered.
– Taxes: Employing several outtargetd for-profit enterprises can impact the taxes assessed on the outsourcing company.
– Liability: It can be difficult to determine the liability of different parties involved in complex outsourcing relationships.
Should You Outtarget?
Why should your company outtarget? If you have a small business and need to focus on the business at hand, the answer is yes, but be wary of the contracts you enter in. Take everything with a grain of salt. Remember you won’t see big savings like larger companies. Outsourcing is a great way of letting your business develop without having to be a jack of all trades, letting you concentrate on its main function. Focusing on one thing will give you the opportunity to have proficiency in your business.
About the guest post author:
Danny Duric holds a bachelor’s degree in Business Management. Currently working as an internet marketing specialist. He is continuously upgrading his knowledge base and occasionally share it with others. Currently writing on behalf of an Australian provider of business process outsourcing services.
What has been your experience with outsourcing at small or large scale?
An infographic via howtogetfocused.com by Scott Sheper:
