Choosing the Right Parts of Your Business to Outsource
Small and medium business owners who are ready to take the leap in the interest of growth and expansion are often faced with the monumental task of figuring out how to grow while still keeping the most strategic components of their business intact.
Business owners will recognise the need for outsourcing when they can no longer maintain focus on growth and must instead focus on operations that are not adding value.
Selecting the Right Functions Deciding what business activity to outsource should be part of the strategic plan for an organisation (Joanna L.
Krotz, Microsoft.
com: Tips for Outsourcing Your Small-Business Needs).
The following tips can help guide a business when developing their strategic outsourcing plans: · Define the specifics of your business and what is the core strategy; · Small business owners can benefit from outsourcing functional activities such as human resource, accounting/bookkeeping and information technology/web design; · Public relations, marketing and advertising including legal work are growing options for outsourcing.
Beyond the ability to focus on core competencies, outsourcing strategic components provides business owners with the advantage of consistently having access to the most current resources that is especially important in the area of technology and software development.
Outsourced Risk There are companies thriving on the concept of providing outsourcing in a way that many businesses have not previously considered (Dan Wood, Forbes Magazine: Outsourcing's Next Wave; May 12, 2009).
Indian based HCL Technologies is an example of a company built on the concept of accepting the risk of their clients.
HCL is essentially an interface between large software vendors and their user based clients.
Costly software upgrades or changeovers are often difficult for a company to financially swallow all at once, effectively deterring implementations that could improve overall business functionality.
HCL gives an example of a $40 million SAP ERP implementation that they take on for their customers at a rate of $6 million over 8 years.
Customers value vendors sharing the risk and ultimately helping to drive success with their stake in the investment (Irani & Shinde, Economic Times: Clients Want IT Vendors to Share Business Risks, Too.
February 18, 2009).
Way Forward A basic business course will tell managers that sticking to a core competency will be what drives the success of an organization.
The effective use of outsourcing will enable businesses to assume leveraging opportunities that can reduce costs, improve functionality and retain focus on the core business strategy.
Business owners will recognise the need for outsourcing when they can no longer maintain focus on growth and must instead focus on operations that are not adding value.
Selecting the Right Functions Deciding what business activity to outsource should be part of the strategic plan for an organisation (Joanna L.
Krotz, Microsoft.
com: Tips for Outsourcing Your Small-Business Needs).
The following tips can help guide a business when developing their strategic outsourcing plans: · Define the specifics of your business and what is the core strategy; · Small business owners can benefit from outsourcing functional activities such as human resource, accounting/bookkeeping and information technology/web design; · Public relations, marketing and advertising including legal work are growing options for outsourcing.
Beyond the ability to focus on core competencies, outsourcing strategic components provides business owners with the advantage of consistently having access to the most current resources that is especially important in the area of technology and software development.
Outsourced Risk There are companies thriving on the concept of providing outsourcing in a way that many businesses have not previously considered (Dan Wood, Forbes Magazine: Outsourcing's Next Wave; May 12, 2009).
Indian based HCL Technologies is an example of a company built on the concept of accepting the risk of their clients.
HCL is essentially an interface between large software vendors and their user based clients.
Costly software upgrades or changeovers are often difficult for a company to financially swallow all at once, effectively deterring implementations that could improve overall business functionality.
HCL gives an example of a $40 million SAP ERP implementation that they take on for their customers at a rate of $6 million over 8 years.
Customers value vendors sharing the risk and ultimately helping to drive success with their stake in the investment (Irani & Shinde, Economic Times: Clients Want IT Vendors to Share Business Risks, Too.
February 18, 2009).
Way Forward A basic business course will tell managers that sticking to a core competency will be what drives the success of an organization.
The effective use of outsourcing will enable businesses to assume leveraging opportunities that can reduce costs, improve functionality and retain focus on the core business strategy.
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