Seventhman Blog

What Value Does Outsourcing Bring to Your Business?

"business value outsourcing"If outsourcing is a valuable commodity these days, how come businesses are still clueless about what they’re getting for their money?  In times when cost cutting is trending, outsourcing is delivering the goods, no doubt.  A survey made on the State of Outsourcing 2011 ( done by the London School of Economics ) showed that of 1,135 respondents, 95% agreed about how outsourcing reduced the cost of operating their business.  Does this mean that profit is the ultimate marker in defining the value of your outsourced project?

The Not-So Paradigm Shift

It’s tough to focus from outsourcing results to business value, and calculating such is still a work in progress.  So, how do we even begin?  It may have to start with the dreaded ‘I’ word, as in: Innovation.  There are plenty of reasons why businesses outsource and it has been a common practice to outsourcing administrative work – the cost effective way.  But more than calculating the financial benefits of your outsourced contract, what exactly are you getting when you opted to get more for less?

Scalability or Competitive Edge?

Outsourcing is not really new and over the last decade, the amount of work outsourced expanded dramatically.  What can’t be outsourced these days?  Still, many are bogged down in the management of these outsourcing contracts that take them away from innovating processes to adding long-term value to the business.  Most outsourcing vendors focus too much on the cash-cow syndrome, trying to cut deals and bait clients with the lowest cost imaginable.  Yes, this can be great for competition, but it will not bring sustainable value in the long run.

Quantity Doesn’t Mean Success

The real business value of outsourcing comes into play when the quality of the results or work gained contributes to meeting corporate goals, or even exceeding it.  You shouldn’t measure your success with the number of outsourced workers or the number of transactions made by the vendor of your choice.  Are you practicing due diligence in partnering with your 3rd party provider?

Do You Have What It Takes to… Change?

When things go wrong, are you willing to abandon the cause?  Perhaps, it’s high time to leave processes and technologies that don’t deliver results.  Have you monitored your key performance indicators lately?  Issues do happen in outsourcing, but it can be detected and resolved before it morphs into a cancer that will eat on the health ( and wealth ) of your business.

The trend on outsourcing looks good and there’s no limit to what you can outsource today.  The challenge now is coming up with new and creative ways for outsourcing to add value to your business, and make sure that efforts made will deliver results with stunning consistency.

  • http://www.arcitsolutions.co.uk/ Peter Rafferty

    Good write up on the values of outsourcing.  It can really bring down costs for a business.

    • Anonymous

      Thanks Peter, been very busy- just got to read your comment. -Shaleen

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  • http://filsupport.com/web-design-outsource/ Web Design Outsource

    Very well said! Outsourcing was indeed a great way for business to boost, and benefit for the employment as well. Thanks for sharing!

  • http://www.tatvasoft.com/offshore-outsourcing.asp Nicholas Hooper

    Even I believe that in outsourcing quantity doesn’t makes sense one should look for quality which is main thing to get to what you are looking for. If quality and quantity both is there, then it does a good job.

    • Anonymous

       Thanks Nicholas.  I like the idea about this balance between quality and quantity when it comes to outsourcing.  Cheers!

  • http://www.syntacticsinc.com/search-engine-optimization/ SEO Philippines

    Outsourcing is the act of one organization getting with another organization to offer solutions that might otherwise be conducted by in-house workers. Often the projects that are contracted could be conducted by the organization itself, but in many situations there are financial benefits that come from outsourcing. Many large organizations now delegate projects such as answering services company solutions, e-mail solutions, and pay-roll. These projects are managed by individual organizations that are dedicated to each service, and are often situated offshore.

    • seventhman

       Thanks!  I think that it’s just  matter of location where you source and we should stop labeling it as ‘on’, ‘in’ or ‘out’.

  • http://www.littlefishsupport.com/it-outsourcing Andy Freeman

    I’m not such a very business minded person but to answer your question if profit is the ultimate marker in defining the value of an outsourced project,my answer is yes.Outsourcing can really ultimately lower job costs for companies.

    • seventhman

       Thanks Andy – I guess cost is still the top driver for outsourcing.

    • http://www.profiletree.com/ ProfileTree

      Good point out with ”
      Outsourcing can really ultimately lower job costs for companies.” :)

    • http://www.imensosoftware.com/ Imenso Software

      Good Replied from your side.

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  • http://www.seooutsourcingshop.com/ Aprajita Kohli

    Great points you have mentioned in this post. Outsourcing was indeed a great way for business to boost, and benefit for the employment as well.

    • seventhman

      Thanks Aprajita for sharing your thoughts!