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Outsourcing Strategy: Guide to Outsourcing Decision

Getting Started: the basic outsourcing strategy is to analyze your business operations, in order to find out the areas that would be most beneficial when outsourced. Also, see if outsourcing would be best for your business strategic plan. No doubts, outsourcing has been immensely beneficial to both small and large organizations over the years. However, the benefits are guaranteed when proper analysis and decision are undertaken.

Interestingly, a lot of businesses today outsource on a daily basis without seeing the act as outsourcing. Perhaps, the reason is simply because of the media’s presentation or opinion about outsourcing.  The present day media see outsourcing as job shipment to overseas locations where low wages are prevalent. However, outsourcing is a powerful tool that any organization can use to achieve cost benefits among other advantages. 

Outsourcing Strategy
As mentioned earlier, the first strategy in outsourcing is proper analysis, to find out the business areas that would be most beneficial when outsourced. First, weigh the cost of outsourcing the intended business function against the cost of running it in-house. Also, consider if the potential benefits have long term effects on your business. Your analysis should be thorough and spelt out in numerical values (if possible) for clarity. 
Also, in hiring a vendor, outsourcing strategy is highly required. You would not want to end up with shallow and shabby result. So, your vendor hiring technique should be profound and well-structured. Refer to our previous post on “Guide to selecting outsourcing vendor”.

Outsourcing Success Tips
Successful outsourcing is guaranteed if the best practices are employed in managing the process. Thus, well-articulated outsourcing strategy is necessary before and after sealing off the contract. Hiring the lowest bidder does not mean successful outsourcing. Obviously, the lowest possible cost is beneficial. But, you may end up spending more due to low standard result. Of course, you will certainly re-outsource a shabbily completed business function at extra cost. Therefore, profound vendor selection process is necessary, it is the beginning of successful outsourcing. 

Vendor selection process should not be done hastily. A company should set up an in-house or in-country committee that would act on behalf of the organization to supervise the entire contract. The supervision starts from the point of hiring a vendor down through the lifespan of the contract.

A company may also consult an expert to get direction on outsourcing best practices. So, achieving the best possible benefits with outsourcing requires a lot of strategizing and effort. Outsourcing has evolved to become a strong pillar for organizational growth. Consequently, the entire contract should not be handled with levity, from scratch to finish. The necessary internal structures should be put in place to achieve the best result. 

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting http://www.123Employee.com


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