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Answers to Basic Outsourcing Questions

by: Sarah Joson

Tuesday, April 2, 2013 | Outsourcing News |

Businesses that are thinking of sending out work to service providers often face these basic questions. What processes should businesses outsource? Why should they consider outsourcing? When should they outsource their processes?

An article posted at SmallBizTrends.com shares the answers to these outsourcing questions.
 
WHY
Outsourcing carries a lot of benefits to businesses, specifically start-ups - and small to medium ones. It is proven to bring significant cost savings. It could lead to optimal growth due to the fact that labor and operational costs are far lower than creating a team that will work in-house.

It also helps alleviate work load for key decision-makers of the company. Since they are preoccupied with several tasks at once, there are instances when certain processes are overlooked and affect the efficiency of a company.  With outsourcing, they are able to focus on more important issues that affect the core processes of an operation.

WHEN
The time to outsource generally depends on the requirements of a business. For instance, a firm needs to double the output for a specific period, they can outsource this process instead of hiring more employees in-house.  Another is when the talent they need is not available internally - even locally, and if talent is available, it could cost the company a pretty penny.

WHAT
Repetitive and time-consuming tasks are usually at the forefront of outsourcing deals. An example would be data entry. Instead of assigning it to internal employees, it could easily be sent out to third party service providers that will make sure that the task is carried out properly.

High-valued positions that require specific skills are often hard to find and local talent may be expensive. An example of this is a software developer. Work can be done remotely and with proper management from outsourcing service providers and grid-locked contract dealings with freelancers, the outcome could be a success.

HOW
Business owners should first do an audit of their internal operations before seeking out and sending RFPs to third party service providers. They should identify the key areas that are plausible for outsourcing, countercheck with the budget, send out request for proposals (RFPs) to reputable providers, and perform due diligence.

Once each factor is properly identified, they can now work on the contract and identify what they want out of the outsourcing relationship.

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