Lower risk and higher efficiency with outsourcing

BY YAP KENG TECK

Businesses seems to be back to normal or should I say the new normal. Everyone is getting back into momentum to revive their business in this Recovery Stage. The question is how can we operate effectively to be ready for the future opportunities or challenges? Are we going to work and operate as before?

OUTSOURCING
This month, I would like to bring back the concept of “Outsourcing”. Outsourcing is the business practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company’s own employees and staff.

This practice is more relevant now than ever. It is not a new concept at all but businesses especially SMEs have been reluctant to accept and adopt it. In today’s economy, nearly all the operations can be outsourced: Accounting, Brand and Marketing, IT, Office Maintenance, Human Resource & Training, Packaging and some production can even be outsourced to a 3rd party. Fearing lost of control and lack of trust are the most common reasons why only few SMEs adopt this business practice.

Outsourcing is a practice usually undertaken by companies as a cost-cutting measure. But it is also about higher efficiency, productivity, better performance plus lower operating risk. It is easier to sack a service provider if they do not perform instead of firing your internal team members. Thus, lower investment risk.

WHAT SHOULD BE OUTSOURCED?
The Idea of outsourcing is for you to focus on what you can perform best and allow others to support you on what they can do best. There is no straight forward formula. It is time to outsource when you realise some parts of your operations are consistently under performing.

Let us use Strategic Branding and Marketing Communication as an example. There are four main elements namely, Strategy Development, Programme Planning, Programme Execution plus Monitoring and Corrective Actions.

A business owner may be good in planning and have an executive who helps execute the marketing plan. Yet, he or she may lack on brand strategy. On the other hand, a business owner may be a visionary with great strategies but do not have a marketing manager to help him/her to detail out the plan for smooth implementation.

Businesses or SMEs can use the 4 key factors below to determine whether a specific tasks or operation is to be outsourced or insourced.

Business Owners should consider which specific tasks to outsource. For example, if your company does not have a strategic marketing manager, then hire an outsourced branding and marketing consultant for advisory and strategic planning but let your marketing executives to perform the tasks. If you have a marketing manager, he/she can focus on strategies while outsourcing the marketing support tasks like email marketing, social media management, creative productions to others.

WHO SHOULD WE OUTSOURCE TO?
Outsourcing is not a straightforward process. It is a form of partnership which requires beyond expertise, efficiency, and cost. We need to look at another two factors to find a good outsourcing partner.
• Understanding your industry and business – Outsourcing can only work if your outsourcing partner understands or spends time to understand your products, process, people, business, market. This is to ensure the relevant tasks or operation performed can seamlessly integrate to your internal operation so to work as one. Yet, it also depends on whether it is a strategic or just a routine task.
• Chemistry of your outsourcing partner –They will be working closely with you and your team members. Hence, there must be chemistry to work cohesively with minimum conflict. Very often, an outsourcing partner who can work well with your team performs better.

Outsourcing is not a must but certainly an option which business owners should consider. It is a concept of productivity and performance instead ownership of talent, process, or machines.

When all operations are focused under one roof, none can be executed. Let us be prepared and not faced with the same risks as before.

The article is written by Yap Keng Teck is the Founder and Managing Consultant of Bizsphere Brand and Marketing Group, and National Vice President of SME Malaysia

LEAVE A REPLY

Please enter your comment!
Please enter your name here