Fact: Your business will not thrive if you’re spending all your time doing tasks that don’t help it grow. Performing jobs that aren’t your core function is clearly not the best use of your time. But these tasks need to be done. So what’s the solution? Outsourcing.
If you’re thinking of outsourcing in order to free up your time, to save you money or even to simply put the task in the hands of a professional, there are a few things for you to consider if you’re going to make the most out of outsourcing.
“Outsourcing allows your team to become much more proficient and get training and get progression through an organisation,” says Mike Gedye, Senior Director for CB Richard Ellis (CBRE) Global Corporate Services.
WHERE TO BEGIN
“The starting point would be to know what you’ve set out to achieve through the outsourcing process,” says Gedye. “Define what success looks like to you.
Too many people set out in the outsourcing process not really knowing what they what to achieve.
Sometimes that is cost saving or focussed around organisational chain or sometimes it’s around change of service levels.
The ones that fail their objectives often really haven’t defined what they want to achieve from the outsourcing process.”
CB Richard Ellis (CBRE) Global Corporate Services team has a global outsourcing advisory business.
It provides integrated real estate outsourcing solutions on a contractual basis to multinational corporations, the healthcare industry, and the public sector worldwide.
“If you want to focus an outsource that drives savings then you need to know what you’re paying today, which sounds pretty obvious but you’d be surprised by how many people don’t have a handle on their portfolio,” says Gedye.
“I think the supply chain is able to provide a more specialist capability than an in-source solution.
In source teams tend to be quite generous in their capabilities, whereas if you take it up to the supply chain who are much more dedicated specialists in different areas who can be brought into your portfolio.”
KNOWING WHAT NOT TO OUTSOURCE
Deciding what to outsource should be a little more strategic than just outsourcing everything you possibly can.
There are certain rules and procedures that will help you decide what to outsource and to not to outsource.
“The received wisdom is not to outsource a problem,” explains Michael Sinclair, head of outsourcing at law firm, Simmons and Simmons. “This is a mantra in the industry.
So if you have a problem which you can’t sort out yourself, outsourcing it is generally not going to fix the problem. So normally what we recommend is that you get your house in order.
You make sure that it’s working internally, so you can show the supplier how you benefit internally, how are they going to improve on that?”
Sinclair has been in the outsourcing business for about twenty years and has focussed a lot on financial services and financial institutions looking to outsource.
The closer you get to the core functions of the business the more difficult it is for you to outsource.
So the best thing to do is outsource where it is not your core business. “We’re a law firm so it’s not our business to run a telecommunications firm, so we outsource that. It may be inappropriate to outsource a core function,” Sinclair says.
Sinclair believes that where businesses can go wrong by having unrealistic expectations about the amount of savings that outsourcing can achieve for them.
“If you think about what a supplier is trying to achieve,” he says, “in a perfect world they’ll want to achieve a 20 percent margin on the costs for each outsourcing.
You typically see CFO’s thinking I want to achieve 20, 30 percent savings by doing this outsourcing and then they find out that it may only be 10 percent.”
OUTSOURCING HOTSPOTS
In terms of where outsourcing is greatest, UK and Ireland remain dominant in this market and are forecast by Forrester Research to account for 75 percent of all European offshore outsourcing by 2011.
“I think for 2010 we’re seeing the emergence of outsourcing in complex and emerging markets; so middle-eastern portfolios that haven’t really been touched,” explains Mike Gedye. “The supply chain and markets are beginning to see some maturity, so we’ll see more outsourcing in emerging markets.”
Sinclair mirrors Gedye’s opinion and offers a few destinations to which wealthy countries with high labour rates will outsource to take advantage of lower rates.
“When we look at projections, it’s interesting because they suggest that the Middle East and Africa will be the next frontier on off-shoring/near-shoring. And they mention in particular the UAE and Garner along with Egypt and Jordan.”
A well defined and coherent outsourcing proposal, based on realistic figures and predicted savings just might be the tool you need to see your business grow.
Source:http://www.businessrevieweurope.eu/business-features/operations/when-why-and-where-you-should-outsource
