Outsourcing has been gaining momentum globally in recent years. Yet often I hear business owners say they can’t afford to outsource aspects of their business but, when questioned, it becomes apparent that they have focused solely on the out-of-pocket costs without considering the benefits and overall cost-savings available to the business.

Why outsource?

Outsourcing is simply the delegation of certain tasks to external parties to perform on behalf of a business. Outsourced providers, being specialists in performing the tasks delegated, typically offer a higher level of expertise than you can get from a ‘generalist all-rounder’ staff member who you directly employ. This means they can provide a professional service on a very cost-effective basis due not only to their expertise but also to the economies of scale that specialisation allows.

Logically, outsourcing makes a lot of sense.

When to outsource? How do you assess opportunities?

In assessing an outsourcing opportunity the first issue is to compare the costs versus the benefits. The costs are easy to determine but it is surprising to see how many business owners struggle to ascertain the true benefits.

Many owners make a comparison of the actual cost against the cost of wages for an employee to do the same task.

This is only part of the picture. It fails to take into account what can be achieved with the time saved from outsourcing these tasks.

Each of your staff–including you–should perform those tasks that are the ‘highest and best use’ of your skills and abilities, to add value to the business. If something can be done better by a specialist third party, then outsourcing should be considered.

This frees up staff time to focus on what they do best, and on what cannot be outsourced.

Imagine what benefits can accrue if the time saved was put to more productive tasks including:

  • Extra sales achieved through better follow-up and support of your existing clients
  • New referrals achieved through building stronger customer relationships
  • New products or services brought to market to help grow your business
  • New clients through focussing more effort on marketing activities
  • Extra productivity through a focus on increasing productive capacity

A key point to understand…

Outsourcing is not about replacing staff but rather freeing up time to improve business performance, generate growth and create wealth.

Most businesses, large and small, can benefit from some form of outsourcing. They key is to get the balance right between what you outsource and what you do in-house.

Before deciding that outsourcing is not for your business, make sure you have evaluated the true benefits.

You may surprise yourself at the results.