When it comes to business advice we could all do a lot worse than listen to Virgin boss Richard Branson. Since he and some friends launched a student newspaper at the age of 17, he’s gone on to create a group of companies that generates over $1 billion a year. So when Sir Richard extols the virtues of outsourcing, it’s probably worth hearing what he has to say.
According to the man who’s now reckoned to be the fourth richest person in the UK, “everything in your business can be outsourced…if you’re not emotionally attached to doing it all.” He qualifies the statement by telling businesses that they should keep what makes their companies unique – and outsource the rest.
That’s good advice. Before you decide to join the growing number of companies outsourcing some or all of their non-core activities, it’s essential that you take time to think through which tasks can be outsourced – and which you must keep in-house. Senior management and intellectual property tasks are just a couple of examples that spring to mind when it comes to key areas that you should always hang on to.
If, on the other hand, we’re talking about some of the tasks that could be outsourced, the list is longer than you might think. There’s no reason why work involving telemarketing, data entry, customer services, HR, billing, or email marketing shouldn’t be given to someone else. Website content and lead generation are other well established examples of successful outsourcing.
A word of warning
Working for an outsourcing company, you would of course expect me to agree wholeheartedly with Sir Richard Branson’s views on the subject.
However, I’ve seen too many examples of poorly thought out outsourcing strategies in my time to say that it works perfectly every time. It doesn’t.
But the reason why it isn’t always totally successful is usually down to poor planning. If outsourcing is going to help you drive business growth, it’s vital that you assess the different models out there – and make sure you select what’s right for your company.
Before you take the outsourcing route you must set clear objectives, construct a realistic timeline, weight up the costs, and prepare an exit strategy.
Open all hours
Offshore outsourcing is popular. Going to countries like the Philippines or India – in a different time zone – can almost give you a 24-hour day. When your staff go to bed, the outsourcing partner takes over – helping to complete critical tasks and send it back for your review the next day. More work gets done and productivity increases.
But remember – if you’re going offshore, it’s vital to carry out proper research and an assessment of the country you’re planning to outsource to. Make sure you visit providers and see their operation for yourself
Unlock funds for growth
It’s also important to get the right advice. There are plenty of outsourcing and offshoring experts who can help to show you how to set up a tax-effective offshore company – that will reduce your risk and protect your assets. By reducing your tax obligations, you can unlock funds for business growth. It’s also well worth speaking to other companies who have outsourced their operations – and learning from their experiences.
As with most things, there is plenty of choice when it comes to selecting an outsourcing provider. They’re spread around the world and vary hugely in terms of what they offer. So deciding where you’re going to outsource your operations to – and whether a particular provider will give you the right level of support – is going to take a bit of research. As top football managers are always keen to tell us though, it’s vital to invest in quality. And, like any manager looking to bring in major new talent, a scouting expedition is always worthwhile. A visit to a potential BPO supplier – to see how they operate – will pay dividends in the long run.
We need to talk
One final piece of advice involves good communication. Cultural differences between your company and a BPO provider on a different continent are inevitable – so you need to ensure you understand those differences and how they could impact on your relationship. When embarking on an outsourcing relationship, you’ll avoid many pitfalls further down the line if you take time to talk to your potential provider about exactly what is expected – both by you and of you. Most reputable BPO providers will be only too happy to do this.
To summarise then…outsourcing can bring many benefits – but only if you do it right. The fact that it works is underlined by the huge number of companies that are now doing it. But I can’t over-emphasise the importance of doing your homework first and making sure you’re aware of all the options before you decide to partner with a particular BPO provider.
Get it right and it will work for your company.
Leon Gunning is Chief of Operations at Direct Sourcing Solutions.