Running a business takes solid entrepreneurial skills. Besides, the company owner has to be some kind of a genius with immaculate time management. Why? The answer is simple – since business processes are so diverse that dealing with all of them is no picnic.
As a rule, the owner of the enterprise knows a bit of everything necessary for the company’s operation. Yet, when performing several functions at once, any businessperson sooner or later faces a serious problem. This problem is the lack of time for ever-increasing volumes of work and lack of expertise in the related spheres. Outsourcing is a logical solution that will ease the burden and help the CEO to focus on growing the business.
So, what does outsourcing mean? Usually, outsourcing comes in two main types:
- Production aspects delegation;
- Business process outsourcing.
In the case of manufacturing delegation, the company owner entrusts an entire production process or its parts to a third party. An example of such delegation is the Nike business model. The company has outsourced sportswear production, distribution, and sales. The company itself retained only the design of the manufactured clothes and the management of patents and trademarks.
In small and medium-sized companies, business process outsourcing (BPO) is the most popular way to cut expenses. It implies the transfer of non-core individual business processes to a third-party organization.
How to Start?
If you have never delegated anything, outsourcing will be a tall order. Yet, if you have at least asked a friend to help with homework, you will get into the rhythm with no trouble.
The most common things companies delegate are: the IT sector, marketing, and accounting. Let us take information technologies as an example.
So, the first thing to do is decide on the type of delegation (choose one from the mentioned in the Outsourcing Explained part). Step to involves evaluation of the scope of work to be given up to the third-party specialists. Here, the owner and managers should understand what they can and cannot do without help. The next stage is usually marked by doubts and weighing all pros and cons. Then comes the decision.
Even after this tricky contemplation process, there is one thing left and this is the choice of the subcontractor. In the case of IT processes, the business owner entrusts a core aspect of the entire business to some strangers. Of course, he or she is most likely to get picky about the specialists who will create such an important part of a business as a website or a CRM.
Thus, when choosing an IT outsourcing company pay attention to its reputation and ask for references. It will be a good sign if the company abides by the Agile Manifesto and provides an actual portfolio comprising similar projects.
Things to Outsource
Every business has unique content creation needs. But turning them into reality takes up a pretty piece of the budget. For instance, a copywriter can create basic advertising materials for a business at the beginning. Still, the owner should also consider outsourcing design, SMM, and internet marketing as no one can be good at everything. Modern digital agencies offer a full range of services:
- SEO promotion;
- SMM (Social Media Marketing);
- development of a marketing strategy and corporate identity;
- maintaining a YouTube channel;
- replenishment and editing of site pages;
- site analysis.
Thanks to such companies, CEOs do not have to look for a copywriter, designer, SMM manager, and digital marketer separately. Making the first steps into a new business is associated with high expenses and a lack of trustworthy specialists.
For this reason, delegating marketing-related tasks may be a good option for those starting a business. Besides, not every entrepreneur is good at writing articles and has expertise in marketing. It may seem easy at first, but it is not.
The second key aspect to outsource is accounting. Outsourcing this part of a business will help the CEO focus on the core business aspects, reduce financial risks and, most importantly, reduce costs by an average of 25%. Accounting processes delegation is a widespread practice among startups and young companies.
For instance, around 40% of all small and medium-sized companies in the USA delegate their accounting processes. The trade segment is the key consumer of accounting outsourcing services. A great advantage is that one can outsource selected tasks or a full range of settlement operations of the company to a third party.
The more orders a company has to process, the more questions buyers may have about them. The same applies to products new to the audience. The number of calls to the online store may become enormous over time. So, managers won’t have enough time to answer. This issue may drive disappointed customers to competitors.
Checking emails, communicating with suppliers, and solving petty problems – all these things also take up a lot of work time. To avoid unpleasant consequences, and increase sales, outsource the call-center functions.
This type of task delegation deals with the transfer of functions partially or fully related to information technology to a specialized company. It comes in two types depending on the nature of work:
- Hardware management;
- Software development and maintenance.
Hardware maintenance outsourcing usually includes the following functions:
- maintenance of the company’s computer equipment;
- maintenance of a computer network;
- planned and urgent visits of a specialist.
The second type of IT outsourcing may include:
- Development of websites, applications, and programs;
- Design of these items;
- UX/Ui research and analysis;
- CRM systems development;
- Website maintenance and auditing (including SEO support and search engine advertising);
Retailers often hire IT specialists for one-time jobs, as the issues with the finished site arise quite rarely. Yet, in light of the IT technologies advancement, we witness an increase in hacker attacks on sites. As a result of this trend, companies want to protect their web pages and ask for urgent services from web developers.
For instance, outsourcing services on an online store website management involve:
- website development;
- integration with CRM;
- penetration testing and burglary protection;
- failures and malfunctions elimination;
- webmaster services.
Storage and Delivery of Goods
For obvious reasons, the office space for goods storage simply becomes insufficient over time. As a solution for this problem, one can rent a place in a third-party warehouse. From this location, the goods will be shipped to the delivery service and then – to the customers.
This scheme will save the company owner a huge amount of time on moving and stacking items to save space. Warehouse workers will take care of all the company’s logistics. The only downside to this scheme is that one day a successful business will outgrow it.
Focusing on non-core tasks will take too much time and effort from the management team and call for big financial investments. In this case, outsourcing functions that are non-core to the business will help relieve key people, free up resources and allow them to do what makes a profit.
Due to their specialized expertise, external specialists can also offer new solutions for optimizing business processes. Thus, task delegation frees up space for growth and saves money for young businesses.