Like it or not, outsourcing, as a business solution, is a fact of life for small businesses and startups. They may not have the billion-dollar operating budgets of the Fortune 500 crowd, but technology has made it possible, and more importantly, affordable, for lean and mean businesses to leverage the power of outsourcing.
There?s no doubt that outsourcing is growing in visibility, both on a domestic and a global basis.
In 2008, PwC and Duke University embarked on a three-year journey to track the progress of outsourcing here and abroad. The latest study from that project shows that a ?perfect storm? is brewing in the outsourcing market, a storm that should benefit small business owners looking to offload dome operational responsibilities.
The joint report, released late in 2011, shows that outsourcers are popping up seemingly everywhere, offering low-end commoditized services that allow even the smallest fish in the sea to benefit from outsourcing services.
?The global sourcing industry is undergoing significant changes,? says Arie Lewin, professor of strategy and international business at Duke University. ?Clients expect providers to contribute value beyond just cost savings. Global sourcing is becoming a more competitive environment all the time. Service providers now must offer more than just cost savings; they must add value to their client?s business processes.?
That?s fine for outsourcing providers. But what?s in it for small business owners? What does the massive growth of outsourcing mean to them, and how do they play this new, burgeoning market to maximum benefit?
For starters, take a deep breath, and do your homework. Never go into an outsourcing campaign unprepared. Always remember: If you?re paying more for your outsourcing needs, and getting less, your competitors will gain a big edge on you.
Past that, take these five tips with you toward outsourcing success. No matter what else, go into an outsourcing hunt armed with the answer to one key question: What?s in it for me?
If you can figure out, pretty much to the penny, what you?re getting for the added cost of outsourcing, you?re one big step ahead of the rest of the crowd:
Business Solutions |Is it Cost Effective?
Some areas are easier ? and offer more bang for the buck ? than others. Graphic design and marketing, for example, are good high-target areas. Why pay a graphic artist a full-time salary, with benefits, when you only need several projects done per year?
Business Solutions | Payment
Outsourcing firms often charge by the hour, which can be misleading, because you never know how much productivity you actually get for an hour?s work. Better to get a complete project fee, so you know going in there?s a cap on what you?ll be paying, and you?ll have clear-cut results to evaluate success.
Business Solutions | What?s ?hands-off??
Some small business functions just shouldn?t be outsourced. Financial planning and budgeting, for example, should usually be kept in-house. Ditto for decision-making on hires and sales targets. The idea is to steer outsourcing services toward ?self-contained? projects, like accounting, public relations, printing, search engine optimization, and the list goes on.
Business Solutions | Start Small
Once you decide on an outsourcing firm, take small bites. You?ll want to get an idea how effective the program is going before you go ?all in.? Once you start seeing cost-effective results, ramp up your outsourcing efforts.
There?s no question that outsourcing, planned appropriately, can offer big savings to a small business. Just go in with your eyes wide open, and a firm grip on your checkbook.
It might be one of the best moves you?ll ever make as a small business owner ? or the worst ? if you give outsourcing short shrift.
Brian O?Connell is a former Wall Street bond trader turned professional journalist, who?s been covering entrepreneurship and small business trends for over 15 years. Brian?s articles have been featured in renowned business publications, including the Wall Street Journal, TIME, and TheStreet.com. Brian is a freelance business journalist who writes for Vistaprint, a leading provider of marketing products and services to micro businesses all over the world.
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Tags: Business Services, business solution, outsource, outsourcing, small business, small business owner, small businesses
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