Outsourcing – When is it the Right Option?

Employees have a lot on their plates these days. Companies struggle with the question of adding headcount or growing departments. One alternative that remains a popular business choice is outsourcing.

Research firm IDC claims that companies spent more than $425 billion to outsource key business processes in 2005. The firm also predicts that spending on outsourced services will experience a five-year annual growth rate of 10.9 percent, reaching $641.2 billion by 2009. 

Outsourcing provides the greatest benefits when it gets rid of manual, repetitive, and time-consuming tasks that aren’t essential to core business revenues. This allows staff to focus their efforts on more important and profitable activities. When you think about outsourcing, think about activities that fit the following descriptions:

• Simple transactions that are conducted in bulk, such as data entry.
• Temporary tasks or those that occur in cycles.
• Processes that cost less to outsource then they do to manage in-house.
• Activities that require hard-to-find or expensive skills or expertise.
• Tasks that distract staff members from their primary roles and responsibilities.

Once companies select a project for outsourcing, the next step is choosing the right vendor. With hundreds of service providers, finding just the right one can be difficult. As you go through this process, consider the following:

• Do you need a specialized vendor to work on the project?
• Is this a one-time project or several projects?
• Do several vendors provide the talent you need? Or are you limited to a select few?
• Can the vendor provide samples of similar projects, including results?
• Must the vendor be local? Or can you work with a virtual vendor?

Outsourcing needs change from company to company. That’s why it’s important to narrow your search to the providers who have experience in your specific business who also have a stellar reputation and guarantee a minimum level of service. 

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