Outsourcing is big business today, even for small businesses.
Claims processing, training, human resources, fleet maintenance and data centers are all successfully outsourced. Viewed as a management strategy, outsourcing uses outside resources to perform activities traditionally handled by internal staff and resources. Outsourcing creates value when customers, vendors and supporting professionals come together to set and achieve shared goals.
The 2002 Outsourcing World Summit found that in the past year, outsourcing increased in importance as a business strategy at 73 percent of the attendees' organizations. In addition, 10 percent of the organizations expected to increase outsourcing spending by more than 25 percent this year. Outsourcing is clearly an important business strategy today and will continue to be a force in the near future.
Outsourcing is not new. Organizations understand that it makes business sense. The challenge is being certain that the organization is gaining every possible advantage outsourcing offers; it should be fully leveraged as a management tool. Organizations of all sizes outsource for many reasons. More small businesses are recognizing the value of outsourcing. It can be particularly attractive for smaller organizations with limited staff and resources. Outsourcing enables a small business owner or manager to keep the company's focus on its core business.
Outsourcing can help you:
? Reduce and control operating costs.
? Free staff to focus on core business.
? Gain access to specialized skills and technologies.
? Introduce positive change.
? Gain control over a difficult-to-manage function resulting from uneven workloads, insufficient or unskilled resources.
? Pay for skills when and where needed.
? Expand and contract resources quickly and easily.
? Share investments and risks with a supplier.
? Clarify responsibilities and focus on deliverables.
The decision to outsource does not guarantee success. The right approach as well as proper management and communication are required. Factors that make a successful outsourcing relationship include:
? Selecting the right vendor.
? Having realistic expectations on both sides.
? Understanding company goals and objectives.
? Developing contracts that spell out the details; do not assume a vendor will act as a strategic partner.
? Continuing to manage the relationship.
? Maintaining open communication.
? Ensuring detailed attention to personnel issues.
? Involving senior executives for support.
In an unsure economy when layoffs and cutbacks are common, outsourcing provides an opportunity for increased efficiencies. As the economy improves and you are ready to increase staff, consider outsourcing. If your company had cutbacks, look at those areas for outsourcing. For example, rather than hiring a large programming staff when that is not your core business, look at outsourcing that function. It will allow your organization to be more nimble in responding to market changes.
Budget preparation is another good time to consider outsourcing. The best time to look at outsourcing is when you are setting up next year's budget. Consider this example: Project managers, product managers and executives are being directed to reduce development costs and operating expenses. One of the ways they can do so is to look at outsourcing documentation and/or training. For example, suppose an organization is dealing with increasing demands for customized information over the Web; accumulations of huge amounts of legacy information; a documentation and training system (not single-sourced) that cannot keep up with demands for updates; management demands for shortened development cycles and reduced customer service calls; and temporary increased demand or uneven workflow for implementation cycles, business process re-engineering or technology upgrades.
Handling any of these challenges might seem insurmountable for an organization with or without a documentation or training department. Just the thought of moving tens of thousands of pages of legacy documentation into a new system is daunting, as is training new users on a new application.
These non-core businesses can be outsourced successfully. If the organization can find the right vendor with the skills, resources and expertise to handle the job, outsourcing should be considered for the benefits listed above. As outsourcing becomes more common and accepted as part of every business's operations, it will be increasingly difficult to imagine how any organization can survive, let along prosper, without outsourcing.
ANN MOYNIHAN is president of Documentation Strategies Inc. in Rensselaer.