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What is outsourcing?

Outsourcing is the process of contracting out a particular business process as opposed to performing it internally. I know of no organisation that is large enough and sophisticated enough to perform every part of their business function in house.

The question then becomes, “Which business functions should I outsource?”  Namely, any function which can be delivered more efficiently and cheaply by an external provider than it can by your own staff. Some functions are easy to outsource, very few businesses produce their own electricity because the processes involved are complex and require large capital investments, there is also a cost effective and convenient alternative, outsourcing.

Where should I outsource?

When it comes to more complicated functions and client facing roles, the process of outsourcing also becomes more complicated. A small team of say 10 people is likely to have a limited number of key specialist skills and everything outside these key areas should be outsourced, but doing it properly takes care and attention.

The general level of customer service in the US is hard to beat and  foreigners notice that. Culturally the US has a long and deep set tradition of good customer care. Contrast that with a country such as India, the general level of customer service is poor, even for local people going about their day to day business, everywhere from restaurants to hotels to local bank branches. Outsourcing a customer service function from an American company, with American clients, to a call centre in India is a classic example of a bad outsourcing decision.

Belmore Virtual works as a UK business consultancy company and we specialise in helping small businesses make good outsourcing decisions. When you are looking to outsource, you should consider whether you can find somebody outside your organisation which can perform any of these functions better and cheaper than your own team. It is for this reason in fact, that on a couple of occasions we have recommended that British companies based in London, where overheads are very high, actually outsource some of their customer service to the US.

The key is to get a better understanding of the company and location you are looking to outsource to and find the experts which will deliver an outstanding result. Would you consider using an accounting firm in the Cayman Islands or outsourcing some engineering work to a German engineering firm?

If you’re still hell bent on outsourcing your customer service to the Far East because the US is too expensive, and you have done your research thoroughly, you’ll find out that in the Philippines there are dozens of customer contact centres offering very high levels of customer service. They also speak a very high level of American English and often Spanish and have a culture of good honest customer care.

When looking to outsource try following the below steps:

1. Identify the functions in your business which do not lie directly under you or your team’s area of expertise. There will be a lot, you can’t be good at everything.

2. Chase down better expertise elsewhere, don’t forget to look locally as well as internationally. Be fussy with who you outsource to and interview the prospects over the telephone before wasting too much time.

3. Once you have found your experts, ask them how to make it cost effective for your business. Get the right level of service to satisfy your needs without overspending. Have a clear understanding of the people you are dealing with and exactly what your expectations are.

4. Ensure that when you outsource any business function that the overall level of service delivered is higher as a result, not just cheaper.

Hope you found this helpful!