How To Prepare Your Organization for Outsourcing
By Monika Mueller
We probably don’t have to tell you about the many benefits of outsourcing, from cost savings and access to specialized skills to around-the-clock development and protection against attrition. So it should come as no surprise that outsourcing is on the rise around the globe, and the trend shows no signs of slowing.
In the mist of an ongoing IT labor crisis, more companies are turning to outsourcing. In 2019, the global outsourcing market was worth $92.5 billion and nearly 34% of companies outsourced some of their network operations. By 2025, the global IT outsourcing market is expected to be worth a whopping $397.6 billion. Is your organization among the many that are taking a closer look at outsourcing? Set yourself up for success by following these four key steps.
Determine What Work To Outsource
The first step to adopting an outsourcing model is deciding what work to outsource. First, set your goals. Then, take a close look at your processes and activities to determine where you’ll benefit the most. You’ll want to keep your strategic IP in-house, of course, while activities outside the realm of intellectual capital are worth considering.
Take a close look at areas where there are critical skills gaps within your internal team. Does your organization have the time, bandwidth, and resources to train internally, or would these efforts take away your team’s ability to complete core business functions?
Consider areas where you need to free up internal bandwidth for higher priority activities. Are there mission critical areas your team could focus on with more time? Will you improve efficiency if tasks and responsibilities that may not align with employees’ strengths are taken off of their plate? Consider areas like production support, help desk and other managed services.
Assess Total Cost Holistically
When considering the cost of outsourcing, many organizations look solely at labor costs, which doesn’t provide a complete picture. It’s important to assess the total cost of preparing your organization, including costs like adding staff to manage outsourcing, laptops that may need to be provisioned, and reporting tools that may need to be acquired. Taking ownership of a holistic cost analysis will give you a much more accurate picture than simply comparing the cost of your internal labor versus outsourced resources.
Consider Adoption Within Your Organization
There are both cultural and organizational factors to consider when partnering with an outsourcing firm. On the technical side, it’s important to identify and address any operational processes that may need to be modified in order to accommodate an outsourcing partner. This may include key areas like contract administration, training and infrastructure.
You’ll also want to consider integration with your internal team. How will your organization embrace the idea of outsourcing culturally without spooking your staff? While it’s important to evaluate cultural and language differences, you also need to recognize and address any fears or insecurities that your staff may have. Your team’s buy-in is crucial for seamless integration and effective collaboration, so it’s worth stressing how outsourcing will benefit them personally — for example, by taking unwanted tasks off of their plate
Choose the Right Partner
Finding the right outsourcing partner is the most important step to preparing your organization for outsourcing. A company that will serve as a strategic partner, as opposed to a tactical vendor, will minimize your risk and set you up for a long-term relationship.
Of course you’ll want to consider the skill level of the team, and the track record of the company you’re evaluating. Beware of the bait and switch, and avoid companies that hire off the street to fill your needs. Be sure to take a close look at the firm’s own recruitment process. Partner with a company that screens thoroughly, and don’t be afraid to ask to interview key resources directly.
Find out what happens if one of your team members leaves during the engagement. Is there a continuity guarantee? And how fast can your team get started? A team with extensive experience doing the kind of work you’re hiring for can usually ramp up quickly with minimal training.
You should also consider the ability to scale resources. If and when you grow, can your outsourced team grow with you? And if your needs change, can your partner pivot without disruption or delay?
Finally, always consider geography. Are you looking for a team with a similar time zone to facilitate collaboration with your internal team? Or, are you looking for a team to pick up where your internal team leaves off at the end of their work day? Is speed to market or around-the-clock production on your wish list? You’ll need a partner with locations strategically located around the globe.
Think Softensity could be a fit for your outsourcing needs? Get in touch.