Do you currently outsource? Are you thinking about outsourcing? According to a 2014 Grant Thornton survey, 40 percent of worldwide businesses either outsource now or are planning to do so. Tandem NZ breaks down the 4 kEys (or 4E’s ) of outsourcing — Efficiency, Economy, Experience and Engagement.
Number 1 Efficiency
Being efficient means much more than simply cutting costs. Does outsourcing increase efficiency? If you outsource to cut costs and improve the efficiency of your business operations, you are in good company. Things get done quickly and freeing up time for your internal staff to concentrate on core business tasks will also contribute to increased business efficiency.
Several fields have successfully used outsourcing to improve the efficiency and gain an edge over their competitors; IT, data entry services, creative services, research and analytics, engineering services and financial services are a few just leading examples.
Number 2 Economy
The benefits of outsourcing have been shown to contribute to a higher standard of living for all parties involved. In the ‘offshore’ country valuable jobs and self-worth are created. In ‘home’ countries increased profits and savings see businesses invest more locally and consumer costs are frequently reduced. Basically what we call a ‘Win – Win’ situation.
Number 3 Experience
Typically concerns about security, quality and risk are expressed by companies in the early stages of an outsourcing decision.
These issues can be quickly dissipated however. Make sure to do your due diligence before finalising any outsourcing decision or contract — don’t “sign on the dotted line” unless you are comfortable that you are dealing with an outsourcing partner that can show proper process and procedures are in place.
Number 4 Engagement
Critical engagement processes are needed right from the beginning in any outsourcing relationship. Understanding and communicating issues such as objectives, scope, work processes, requirements and customer expectations need to be clearly laid out for all parties.
Engaging with your outsourcing partner on a regular basis works both ways. You must devote sufficient time for effective business communication with the outsourcing company.
The 4 kEys in one
Outsourcing comes in many shapes and forms. Some are more complicated than others. Some are long or short term plays. Find an outsourcing partner that can successfully meet your expectations and the 4 kEys described.