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By: Tamara Bailey, Guest Writer 

The business practice of contracting an outside party to carry out services previously performed by the employees of a company may be new to several companies, but it is far from a novel idea and has existed for decades. 

However, many companies consider outsourcing a big leap, and rightly so! After all, you are entrusting a portion of your business operations to another entity. It is therefore crucial that companies know the exact stage at which they should start outsourcing to increase productivity.  

Business Development Consultant, Tastey Blackman, said the goal of outsourcing is always to increase flexibility for the business and reduce operational expenses.

 “You outsource when you realize that by paying a third party to do the work for the company, it actually saves the company money… probably your company is expending a lot of time, effort and money on something such as software development, but the company is really inefficient and is not an expert in the area. Then it would be a good time to outsource and save money.”

She says outsourcing is not merely a cost-cutting measure to reduce overhead expenses, but is also a valuable and prudent strategy that allows employers to protect employees from being overworked. This is a big deal, especially considering that burn-out is amongst the main causes of de-motivation, emotional and physical illnesses, and mediocre performance in the workplace.

“Another reason for outsourcing is when you have employees who are performing multiple roles and they are overworked, which will lead to a decrease in the quality of their productivity, causing them to become prone to error…You can free up your team’s bandwidth to focus on things that are more relevant to the core business activities.”

1. Do you have a business operation with high demands that are unintentionally neglected due to overwhelming pressure?  

According to Blackman, at this juncture, you most certainly need to entertain the idea of outsourcing. 

“…This is to reduce the risk of bad reputation of the company and to enable the company to fulfil its [obligations] and meet its demands.” 

That’s the reason scores of multi-national and even local companies outsource operations such as customer service engagement. They know that relating to customers’ concerns, questions, and even responding to commendations is crucial to the life and bottom-line of the company, but it is also increasingly demanding and may not receive the priority and consistent attention it requires. 

2. Do you have a talent-shortage?

Talent is the engine of organizations, however so many executives make the damning mistake of ignoring talent gaps.

Black asserts that “A company also needs to consider outsourcing when the company cannot find the right talent to employ in-house.” 

3. Are you distracted by routine tasks that while important, prevent you from being innovative and strategic? 

It’s definitely time to outsource!

Blackman explains that “when tasks are routine and take up a lot of time, and both the employee and management are prevented from focusing on some of the more strategic work that the organisation needs to undertake to develop new business ideas [outsourcing must be considered as a viable solution]”

The reasons to start outsourcing go way beyond these three fundamental pillars, but one thing is certain- outsourcing adds and will continue to add value to companies by offering solutions to their unique challenges. 

However, while the value of outsourcing cannot be denied, Blackman cautions companies who find themselves assessing whether to take the leap. She highlights that there are companies that are not yet at that place in their development to be considering outsourcing and should be careful to assess the state and needs of the company before entertaining the idea. 

“If the company is not very clear on what roles and responsibilities that it wants to outsource, that is a reason for not outsourcing. Additionally, when the company is not able to monitor the output from the third-party company they are trying to work with, it is not a good time to outsource” 

She said the reputability of the third-party company should not be overlooked and companies should be wary of outsourcing when they cannot guarantee quality. 

“It is great for the company to do its own internal research and understand what it wants to outsource and know how to measure performance that they are looking for or the return on the investment they are trying to ascertain” she ended. 

The question to outsource or not, really boils down to the specific challenges, strategic direction, and capacity of the company. However, if you find that your organization is suffering from an in-house talent shortage, distracted by routine tasks that limit your ability to develop strategic and creative business ideas, or that you are unintentionally (or perhaps intentionally) neglecting important operations simply because they are insanely demanding- it’s certainly time to outsource. However, before taking the leap, ensure that you assess your outsourcing-readiness to minimize risk and reap the benefits.