Outsourcing has many advantages for the business
Many businesses choose to outsource primary functions of their operation but what are the advantages of outsourcing?
Having the right external provider managing some aspect of the business is likely to:
- Enable the business to access expertise or resources that are otherwise not available, or affordable, in-house
- Enable the business to take advantage of economies of scale
- Enable the business to re-focus in-house resources and staff on key business objectives
- Make financial savings possible if the supply company can do the work for less than it can be done in-house, taking opportunity cost into account
A critical element of successful outsourcing is to form a meaningful partnership between the outsourcing company and the supply company. This means developing an understanding of what each wants from the partnership and how both can work together to achieve these goals. In order to achieve this the two parties must establish:
- A shared ethos and way of working.
- A shared understanding of the aims and objectives of both parties.
- A vision and a plan for the work which meets the aims and objectives of both parties.
- Who is responsible for managing the work
- The total cost of the arrangement so that there are no nasty surprises.
- Dates for regular review with an open mind about making changes as necessary
- A formal contract which allows sufficient control for both parties and the flexibility to alter objectives when and if needed
Ultimately, effective outsourcing looks at more than simply costs reduction as its goal and is best achieved through partnership working and developing trust and a sound working relationship which benefits both parties.