What Nobody Tells You About Outsourcing
“We have outsourced before and did not like the quality of the deliverables, hence we will no longer outsource!”
“Any outsourced work item almost takes twice the number of hours otherwise taken by my in-house team. Cost-effective Outsourcing is a myth.”
These are common statements I hear when I initiate a conversation with my overseas prospects. Over the years, I have realized that there are a lot of myths about Outsourcing. A lot of people who could otherwise benefit a great deal from outsourcing refrain from it, only because of a lack of knowledge around outsourcing.
Outsourcing is a piece of Cake!
Suppose you went to a bakery and bought a chocolate cake which did not quite turn out to taste like you expected it to. Would you stop buying cake altogether or would you search for a different bakery?
Often, companies refrain from outsourcing because of a past bad experience with their service provider. Well, outsourcing is a tad different from a cake and one bad experience doesn’t make outsourcing a taboo!
Having said that, I wouldn’t agree with those either, who say everyone should outsource. So the pertinent question is…
Who should outsource?
Let’s go back to my example. You have to throw a birthday party, make arrangements for guests, put the decorations on, buy gifts… you know the routine. Now with so many things going on, you obviously won’t have the time to bake a cake or even if you do plan on baking it yourself, you would have to hunt for the right ingredients to go in it. Solution? Voila! A Bakery! Not only do you get the options in the flavours and sizes but also you save a lot of time, energy and money by just buying the cake off a bakery.
Similarly, companies who are in a completely different business line, cannot look to hire resources for their IT needs and then keep them on bench. That would not only cost them a lot but their focus would waver time and again to manage the operational cost of those needs. Whereas, in an outsource/offshore company, one can find a pool of resources having expertise on various technologies. Talk about going to a one-stop shop to get all your needs sorted! Doesn’t that sound wonderful?
When should IT Companies outsource?
I explained who should ideally outsource their work. But that does not imply that IT companies themselves cannot outsource to get the work done. I am sure most of us have faced at least one of the following situations:
- When you don’t have a particular skill required to get the job done:
How many times have we faced this? I bet a lot! Sometimes a project comes in with requirements that fit your expertise, except for maybe one teeny tiny part that is out of your expertise and therefore you are forced to let go of that project with a heavy heart.
- When projects are coming in but you are understaffed:
Similar to the previous situation, if you don’t have the resources to work, you again end up letting go of the project. Doesn’t situations like these make you wish you had more resources or skills sets available on hand? Of course it does, BUT let’s not forget, YOU would be the one paying for the infrastructure and salary cost for them, and if they are on bench, well, you are staring at huge overheads.Often business owners face a situation where they are at crossroads to decide whether to hire a new resource or outsource. Because humans are hard wired to play it safe, most of us would go with the former option and hire someone. And as I quote Mark Zuckerberg “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that’s guaranteed to fail is not taking risks”, the ball is in your court!
Why should you Outsource?
IT or non-IT, all organizations are set to reap some serious benefits if they choose to outsource.
- Focus on Your Core Business: Once you have a trusted, dedicated outsourcing team managing your IT needs, all you need to do is to get a daily or a weekly update from them. This would ensure you spend your time and energy focussing on your core business, therefore positively impacting your top line.
- Technology Expertise: Thanks to the rapid speed with which technology keeps changing, in-house expertise is often insufficient for your growing and ever-changing needs. A good outsourcing vendor will always have expertise in Cross platform integrations, expertise on diverse frameworks and APIs, ensuring your needs are fulfilled.
- Business Understanding: Good outsourcing companies have a clear vertical focus, ensuring that they have skilled SMEs who understand your business needs and guide you through the correct processes and operations.
- One-stop shop: Why hunt all over the place for resources with experience in different technologies and spend resources on hiring and managing them, when you can just send the requirements to a company with all these expertise under one roof?
- Delivery Quality focus: There’s a beautiful quote by Jim Rohn which says, “One customer well taken care of could be more valuable than $10,000 worth of advertising”. If an outsourcing company has to compete in today’s world, it has to focus on the quality of services delivered. And if a company has retained clients over the years, that itself speaks enough about the quality of work they provide.
- Global Delivery Centre (GDC) and Savings on Infrastructure cost: Many companies are offering this as one of the engagement models for their clients where it is a win-win for both the parties. If you are looking to open a GDC, why not save a huge chunk of budget on the infrastructure cost and partner with an outsourcing vendor instead who can serve as your GDC?
- Pay for what you use, therefore save on infrastructure & operations cost: One of the perks of using Outsourcing as a service is that you only pay for the hours of service that you utilize and it gives you the flexibility of scaling the team as per your needs. Add the factor that you do not spend on the infrastructure and it’s a win-win deal you’ve got yourself!
- Cost benefits: You can save money by not outsourcing at all, but when you’ve got to accomplish something, outsourcing makes for a worthwhile investment. Efficient and quality delivery services reduces costs, improve your company’s effectiveness and boost your bottom line.
- 24X7 Support: Engage with a quality outsourcing partner and ensure that your systems are take care of round the clock. You never have to lose your sleep over the maintenance and upkeep of your systems anymore!
If done in the right way and with the right partner, outsourcing can and will work wonders for the growth of your organisation.