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How To Afford Outsourcing


  • How To Afford Outsourcing

Outsourcing isn’t just for big companies.

It’s good for almost any company.

So why aren’t more small and mid-size companies outsourcing tech support or customer service?

One reason is money.

Many small and mid-size companies don’t think they can afford it. So they dismiss the idea out of hand.

But savvy managers can find the money to outsource activities. It all comes down to planning and to using existing resources wisely.

If you don’t think you can afford to outsource tech support or customer service, read below.

The 8 steps discussed there can help you find the money even when things are tight.

1. Determine Your Key Competency

Every company has a core mission. It’s the reason it exists. The mission is usually based on the company’s key competency—the thing it does better than anyone else. Honda’s competency, for example, is building motors.

Make sure key employees are assigned to activities supporting your competency. Activities not supporting it are ripe for outsourcing. Create a list of these activities.

2. Prioritize Non-Supporting Projects

This step follows naturally from the first. Once you’ve isolated non-supporting projects, review them carefully. You may be able to assign some to employees with the right skills.

Those activities you can’t assign and are not essential to your core competency can be outsourced. Prioritize these projects. Then determine what it will take to outsource these projects.

3. Identify Non-Supporting Hours/Money

Once you’ve prioritized the non-supporting tasks, calculate the time employees devote to them. Use an hourly wage. Separate the time and money into the individual projects.  Now identify money you can save by outsourcing these tasks.

Action Point: Make a list of projects you think might be outsourced. Prioritize them based on importance. Next figure out how many hours are going into these projects. Then calculate how much money you can save by outsourcing these activities.

4. Create A Budget

In addition to identifying money you can save from outsourcing, look for extra money you can use—money not needed for other essential projects. Be careful not to take money from key projects.

Look for money not being used in other projects, surplus project money, and money from canceled projects. And don’t forget about money you may be able to generate through added sales or services that result from outsourcing.

5. Focus On One Project

It’s hard to do all your outsourcing projects simultaneously and save money—especially if you’re new to the game. So focus on one project at a time. Make sure it’s a high priority target. Doing things slowly helps eliminate mistakes.

Look for a project that can provide immediate benefits. That way upper management can quickly see the results from the project. If it’s outsourcing tech support, customer satisfaction will be key. Increasing that can dramatically boost revenues.

Action Point: Pick the highest priority project on your list of non-supporting activities.  Create a budget for outsourcing this project.

6. Assign A Cost To A Project

Assign one person to manage the project and to select the provider. Make sure the person is aware of the cost when selecting a provider. Keep money aside for training, materials, and “hidden costs.

7. Keep Tabs On Costs

Once the projects starts, keep tight reigns on it. Make sure the manager assigned to lead the projects communicates regularly regarding costs. How you do it is up to you—e-mail, Skype, or in person. Just make sure you do it.

8. Advocate On-Time Delivery

Allowing a provider to operate without a time limit spells trouble.  So when hiring a provider, make sure it has a set schedule with deadlines.

Doing something you’re not proficient at and/or don’t have the skills for can cost a company millions.

Outsourcing these activities can save your company time and money and can free employees to focus on more essential tasks. This in turn can increase customer satisfaction. And that can boost the bottom line.

Let us put our proven experience in providing tech support for small and medium size companies to work for you. Request a quote from our sales team.