How Outsourcing Could Boost Your Business

The two primary benefits of outsourcing tasks or functions like payroll or IT both contribute to your bottom line. First, you free up time to focus on activities that build your business. Second, the investment in outsourcing brings in expertise that enhances your capabilities.

If you’re considering outsourcing, these tips can help make the process easier.

Identify the projects or roles to outsource

Look for activities that don’t require personalization, are outside your current capabilities, or aren’t costly to get completed through outsourcing.

Clearly scope objectives and expectations

Providing outsourcing vendors with your objectives, timing, and scope of services will get you more accurate bids and capable suppliers.

Set decision criteria for choosing vendors

Collaborate with your team about the factors that will drive your selection process. In addition to cost, consider elements such as customer reviews, examples of work product, internal resources at the supplier, and experience with your industry.

Look for quality over low-price

While going with the low-cost provider is always tempting, the adage ‘you get what you pay for’ hold true in most cases. Use your decision criteria to help you assess the value to the supplier bids.

Ramp up outsourcing activity

You may want to outsource specific projects to evaluate vendors and minimize your risk (and cost) prior to turning over a complete functional area.

Establish relationships to stabilize performance

Transitioning activities to outsourcing will require time and effort. You’ll also need to plan on periodically evaluating the performance of providers and giving feedback they meet your expectations. To maximize the cost-effectiveness of outsourcing activities, try to make long-term arrangements with vendors. Multi-year contracts may not be feasible, but work with suppliers to determine the best approach.

Review and revise your approach

An annual performance review of your outsourcing activities will ensure you’re getting a strong ROI on your investment. You can renegotiate arrangements or put business out to bid if your current vendors aren’t a good fit.

For information about financing your business growth plans, contact Revap Group Capital.

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