A Misunderstood Word in a Global Economy
Cloud Peeps’ 2016 freelance trend report indicated that independent workers were on the path to represent 40% of the US workforce by 2020. Additionally, according to Freelancers Union, the US freelance workforce earned an estimated $1 trillion from freelancing this past year — up from about $715 billion in 2014. Such a large trend shouldn’t be ignored, but what is the best way to utilize outsourcing in your business?
To evaluate outsourcing and the opportunities it provides your business, you first must understand it. There are a few different types of outsourcing, each with different benefits and contingencies.
· Project outsourcing — contracting a company to create and run a marketing campaign promoting your new Office Plants as a Service offer
· Freelance work — contracting an individual to create a vector logo and graphic set around your new Office Plants as a Service offer
· Department outsourcing — contracting a company to invoice your customers monthly and pay your Office Plant Experts
· Role outsourcing — contracting a company to hire an individual to manage your new Office Plants as a Service offer
· Cyclical outsourcing — contracting a company to meet with you every five years to review your Office Plants as a Service offer
Benefits of Outsourcing
You can gain a lot from outsourcing.
· Short term commitments — you don’t wind up with a long-term employee
· Expert — you can have a very specialized resource who is an expert at completing the necessary task
· Hourly/Completion vs. Salary & Benefits — you will likely save on unemployment and benefits along with taxes on an employee
· Operational efficiencies — your employees can keep doing their jobs and not get side tracked
· Don’t have to fund training or specialized tools
· Fresh perspective — having someone else complete a project gives you the benefit of new eyes
Benefits of Insourcing
There are also benefits to insourcing that you don’t get with outsourcing.
· Control — with employees, you have the ability to manage their time, activity, and quality
· Better customer relationships — if employees are continually interacting with an employee, it provides a better experience for customers
Downsides of Outsourcing
Like anything, there are some downsides of outsourcing.
· It can be time consuming to find an individual or company that you will only work with temporarily
· The individual or company might have other projects that take priority
· Usually, it will cost more per hour than an employee
· With a different individual or company completing a task, there will be inconsistencies that wouldn’t exist if all was done internally — this is driven by the concept of institutional vs. industry knowledge.
Ways to Leverage
1. IT/ Help Desk is a great department to outsource. (We may be a little partial) Instead of having to pay for technology, training, and employees, outsourcing your IT is scalable and they must take care of resources.
2. Accounting/ Finance is good to outsource if you don’t have many customers or employees, making a dedicated employee overkill.
3. Marketing is good to outsource because outside people might be able to help create a better marketing message as they can view your business from a different angle. Additionally, marketing expertise is very specific and might not be worthwhile to bring on a dedicated resource. However, this could lead to inconsistencies.
4. Security is good to outsource because there is a lot of legal liability that comes with it. Often agencies hire retired cops and they have their own liability protection.
5. Hardware is good to outsource if your company would benefit from having the newest and best technology all the time. Outsourcing hardware allows you to have someone else upgrade your technology as necessary and handle all the switch over. Additionally, hardware like servers likely won’t be fully utilized by a small to medium business, but they still need a server. Outsourcing is scalable and allows the company to use what they need as they need it.
6. Janitorial Services are great to outsource almost anywhere. If you outsource, you don’t have to worry about purchasing or stocking cleaning equipment.
7. Coffee or tea logistics are awesome to outsource. We use Gold Star out of Wisconsin to manage our coffee logistics. They gave us a Keurig and clean it regularly as long as we order our coffee through them.
8. Event management/ planning is incredibly difficult if you aren’t doing it constantly. Tasks can get forgotten and people are hard to manage. This is good to outsource if you only hold a few events a year.
9. SEO is also very difficult if you don’t have to work with it daily. Having someone else take care of it can be a lot easier than trying to do it yourself and is much more cost effective than having a dedicated employee.
10. Web Development/ Design is similar to marketing and SEO. Having an outside firm handle this is often easier than investing in a dedicated resource, but could lead to inconsistencies.
You don’t have to do everything in-house. It’s smart to utilize outside — or outsource — support for your business! It’s expensive to not have the resources you need, and it’s expensive to over invest in the resources you need. Take what you’ve learned from this blog post and try to identify services that you are already comfortably outsourcing today. What other aspects of your business could benefit from this outside efficacy, reliability, and expertise? Focus on what you’re good at and utilize outside resources as you’re able to in support of your mission.
About Leeward Business Advisors
Leeward Business Advisors is a Wisconsin-based corporation that provides business strategy planning, business improvement implementation, and full IT operational support. They offer world class Cloud Computing services, Cloud brokerage, Managed IT services, and a full US based Support Service Desk (called Quick Answers). Michael Polzin, CEO has 20+ years of enterprise business and technology experience gained while working at Allstate Insurance and Microsoft Corporation. Jason Klein, CTO has 15+ years delivering effective and efficient technology to Midwest companies.