Outsourcing Guide Part 2 : Are you ready for this?
There was a half-joke that I used in my university life: “I can’t seem to get this work done, can I outsource it to you?” This does not quite mean outsourcing but rather passing the buck, yet it worked like a charm. In the world of competition that we live in, business often outsource their tasks to be done cheaper and better by specialized third parties.
WHAT IN THE WORLD IS OUTSOURCING?
In the world of outsourcing, company contacts companies from different parts of the world (or same country) to provide services that might otherwise be performed by in-house employees so that they can compete in the world.
IS OUTSOURCING RIGHT FOR ME?
This is quite a delicate matter, even though almost every company or professional has experienced outsourcing at some point, especially when starting up. In recent studies done by Statics Brain, 35%* of CFOs surveyed said their firm was CURRENTLY outsourcing. More important question will be: Which of the business stated below are you?
New businesses often don’t have the time or are reluctant to create formal structures and fixed overheads when they need to be flexible and able to react quickly to opportunities or changing circumstances. All their energies are needed to develop the business rather than looking after administration. Outsourcing provides a flexible and expert resource to call on at a critical stage in the life of the business.
Businesses growing rapidly can be constrained through a lack of resource and expertise. Outsourcing can provide a rapid resource in a range of expertise wherever it is needed. Rather than be forced to move office to cater for expansion, non-core areas of work can be outsourced to free up space for front-line staff.
Relocation or restructuring
If businesses relocate they have an opportunity to re-engineer their business processes. If some staff do not want to move, there may be an opportunity to plug a resource gap by outsourcing, so avoiding the need to recruit and train. Outsourcing can provide a fresh start and a means of ensuring objectivity in rebuilding business processes so as to increase efficiency or profitability.
When a business is winding down, outsourcing can ease the process and costs by providing a business base and facilities as workloads reduce and the need for permanent staff drops.
Outsourcing can provide a flexible, one-off or occasional resource to account for and administer special projects. It can also provide a temporary resource in the case of unexpected staff absence, such as maternity leave.
WHAT’S IN IT FOR ME?
The most fundamental question in business and even in life. No point doing anything if there is no benefits unless you are running a charity shop and self-satisfaction is your thing. There are many advantages that come from outsourcing your work otherwise 50%* of business in UK would not be doing it!
Reduce Operational cost
One of the MAIN reasons why companies outsource is to cut operational cost. Outsourcing is mainly operated is the less developed country with low operational cost. One of the reasons of low operational cost; low cost of manpower. For example an average architect in Australia gets AUD5000/month and UK architect gets about £2500/month. A highly qualified architect in Nepal gets 30,000rps/month (AUD323 or £216)**. Due to this low operational cost for man power, you get your work done cheaper by qualified experts.
Focus on your Core business
As business grows, company’s limited resources get spread out thinner, and manager’s time and attention gets more limited. Outsourcing can help your business to shift its focus from peripheral activities toward work that serves the customer, and it can help managers set their priorities more clearly. Outsourcing frees companies from having to manage non-core functions, and puts the focus back on their core competencies.
Level the playing field
Most small firms simply cannot afford in-house support services that larger companies have. By outsourcing, small firms can act “big” by having access to the same economies of scale, efficiency, and expertise that larger companies enjoy. Think of us as your sister company. Hello big brother!
Reduce Labor costs
Hiring and training staff for short-term or peripheral projects can be very expensive and temporary employees don’t always live up to your expectations. Outsourcing lets you focus your human resources where you need them most. This also reduces risk of hiring and training a new staff and leaves after the training. Makes you want to go all Hulk on the person don’t it?
Time zone difference
Because of the time zone difference between Asian countries and the West, you can get your work done while your business closes down. Think of us as your over time workers.
Live your life
You might have heard lot of talk on balancing work-life and how to optimize it. Well, outsource some of your leg work and it is achieved!
“Nothing is perfect, but perfect practice makes perfect.” THD
There are downsides to outsourcing (it is not a perfect system), but THD battles to eliminate most of them. We cannot vouch for other companies but we can for ourselves. Read on to find out about the concerns and how THD deals with them.
I AM CONCERNED ABOUT…
Poor/difficult communication with the vendor
All our staffs can write and speak English fluently and has taken the IELTS from British Council Nepal. Most of our staff have stayed/studied overseas so there is no need to worry about cultural differences. As an international company run by British national with internationally experienced staff, there is no need to worry about miscommunication due to cultural differences. For example: “I want a chair” could mean to Indian and Nepali “I want a high post”. Yikes!
For communication technology, we have all the latest. Nepal, to most foreigners, is all about mountains and trekkers. Sorry to bust your bubble but we do have advanced communication infrastructure. THD uses fiber optics for all internet-related communications i.e. Skype video call, email, social medias and online file transfers. For mailing we use TNT or DHL services to delivery simple letters to huge packages with tracking id included. Yes we use telephone too.
Poor quality document
People, please, do not even worry about this. THD prides in delivering quality drawing packages. We even offer a 16hour free trial run for your initial project to gauge our skill. We are so confident of ourselves that we will refund back your full amount if the drawings are not up to your expectations!*
Breaching of confidentiality
It is our utmost importance that we ensure the strict confidentiality and security of all data confided to us from the client’s identity to the project description. We are dead serious!
Difficulty in sending payments to vendor
THD uses an UK bank account which makes transferring of money a breeze. Remember our rates include bank transfer fee too! We provide billing service if it is required by your company.
Not being able to save money
Suvrvey done by Zweig White shows 75% of companies saved costs. The rest of 25% chose a wrong vendor.
My employees being upset about outsourcing
In-house workers may feel insecure when hearing they have an outside “competitor”. The best approach is to keep your people positively motivated. Give incentives and explain them that you outsource the work that would have otherwise made their lives hard.
A baby’s first step is always difficult and a scary experience. We, THD, are here to make sure your first step in outsourcing is a positive experience. Hopefully this whitepaper has given you insights on the upsides and downsides of outsourcing but most importantly answered your question on: “Do I need outsourcing?”