Before You Decide To Outsource

By Sukant Senapaty

The topic of outsourcing has become a hot election debate in the US with the race for presidential election picking up. Never before was Outsourcing so widely debated as is being done today. And interestingly enough everybody has his own perspective, his own judgment. But for the management of corporations and owners of small businesses for whom Outsourcing today is not a mere option but a regular business strategy to achieve organizational goal of growth and efficiency, the million dollar question is whether to outsource or not?

To put it plainly, although there are multiple advantages associated with outsourcing any
process, the benefits accruing to different clients will always differ. Companies are getting up to the fact that its not simply outsourcing a process and get relieved kind of thing but competencies to develop a relationship with an outsourcing firm, and trust on their methodology that matters the most.

So what are the principles that should propel a decision on outsourcing?

1) Why to outsource: This should be the most important criteria in assessing whether to outsource or not. Outsourcing decisions prompted by short term benefits or as a stop gap arrangement will definitely not reap much benefit. Worse, such decisions created in pressured environment like general crisis of the company, transfer the desperation element to the third party vendor and often the entire process collapses even before it has started. Proper analysis with relation to cost, benefits, flexibility and risks involved should be done before starting the actual process. Like every strategic decision which takes time to reward the business, a well thought of outsourcing strategy gelled with the company's strategic plan is sure to be successful and rewarding.

2) What to Outsource: Before embarking on outsourcing decision it is advisable for the organization to know which functions are most important to the organization and whether or not the company needs to retain administrative control over those functions to ensure quality results. One thing that needs to be understood here is that outsourcing the duties does not necessarily mean, the outsourcing of responsibilities. An organization needs to do a clear SWOT analysis before deciding what to outsource. This means it should always retain its core strengths for the in house staff and outsource non key functions like accounting.The following points should be taken into consideration before deciding what to outsource:

> Core competence: Core competence and processes which give clear advantage over its rivals, should never be considered for outsourcing.

> Process which is heavily dependent on physical infrastructure: Such processes should be the first to be considered for outsourcing as it will save precious resources for the business.

> Process that are non value adding and demand specialized skills like accounting should be considered for outsourcing.

3) Selecting your outsource partner: Again due care should be taken to select your rel=nofollow outsource partner. You need to evaluate him on his expertise, experience and capability before making a final decision. It is highly recommended that several outsource service providers be screened before arriving at your prospective partner. Once a decision relating to this has been taken, all referrals provided by the vendors should be verified to establish their authenticity.

4) How to Outsource: The most important thing to realize in outsourcing process is that often staff of the outsource service provider do not have the familiarity of how individual business work for their clients. It is therefore needed that clients establish a mentoring relationship with their vendors and be patient with initial mistakes. Communication and reporting by the vendors staff on a regular basis can do wonders for a healthy relationship at this stage.

Benefits of outsourcing are many. However a careful and patient approach all the way from the conceptual stage till the transitional and maintenance phase ensures that it is really fruitful for the organization and delivers on its real promise of reduced cost and better resource allocation.

Sukant, an accountant by profession is the co- founder of APT Services.Please follow the link http://www.aptservicesonline.com to know more about the bookkeeping services provided by APT Services.

Article Source: [http://EzineArticles.com