Outsourcing a part of your business or even just a specific project can be a highly cost-effective solution. You forego a long list of expenses for a single contract price. Plus, you can focus all of your time on your core business, such as growing your customer or client bases. Not every business has the resources to assemble an in-house team for everything that needs to be done. Sometimes, it makes sense to hire an agency that are already experts on certain tasks to do it for you. Learn more about how you can lower expenditures and get more time by unloading a part or your business through outsourcing.
Cost benefit analysis (CBA) is key to doing business. It projects the net amount of costs and benefits of at least two choices when making decisions. This guides executives to make an economic decision based on quantifiable data.
CBA is especially relevant to investments involving substantial cash flows like choosing new capital expenditure over major equipment overhaul, finance lease over land ownership, and offering a new product line over expanding existing product lines. This makes it easier to choose the best option that offers the highest net benefit or the lowest net cost.
Deciding whether to outsource a part of your business or to do it on your own is one of the common business decisions and one of the toughest to make. You need to consider all the pros and cons to choosing the option that is more favorable to your business within the next twelve months and in the long-run. With CBA, you can list all the figures that matter to both choices, compare analytics such as cash flows adjusted in the present value and eventually pick the better one that will lead to lower costs but higher returns.
Going for outsourcing is a win-win solution. You can usually pay for a fixed contract price, either on a per-project basis or a monthly rate, and you are free from managing such particular part or division. That is both savings on time and money.
Additionally, highly skilled and experienced workers are then able to do the job for you. You get to experience the expertise of professionals who might have been specializing in the task you hire them for. These are just several of the benefits of outsourcing your contact center, manufacturing, bookkeeping, marketing, and other departments of your business.
The caveat and probably the greatest risk with this set-up is the reliability of the third party service contractor. You might read compelling proposals backed by persuasive client testimonials, case studies and impeccable presentations.
But, these alluring words tend to be shallow. You need proof and that means doing research, confirming reviews directly from clients, performing ocular inspection on-site and even asking for a demo tour or free trial. The price, although cheaper, is still a big investment for you. And you need to reap the best value for your money. If the supplier fails, it is going to hurt your business. You can usually ask for a trial or demo period to test their service and see if it produces results at a smaller scale, before committing to them completely.
If you choose not to outsource, you need to tackle the birthing pains of handling it on your own. You need to hire the right people with the right skills. And you need ample time to plan, implement, monitor and evaluate the important aspects. The good thing with doing it on your own is you get full control. You see how a project progresses and you can easily tweak the processes along the way. But if you don’t have the time, the people and additional capital, then you can always ask for professional help.
Several companies have partnered with other companies, domestic or abroad, to work on business process outsourcing. Telecom giant AT&T has long-term business relationships with contact centers based in Asia for its customer service and technical support. Nike has let go of its footwear manufacturing processes to various Asian countries. Goods sold at Wal-Mart are produced from its Chinese partners. These are just of business mammoths that fueled their growth by outsourcing several of their business segments.
It takes guts to let someone do a job for you. But, if that someone can give you the expected benefits and even more, then there is no reason not to outsource. Think which works better for your business now and the years to come.