Strategic Ways To Outsource, And When To Do It
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Few companies function completely independently. Instead, businesses form partnerships with suppliers as well as with contractors. Working with outside contractors, or outsourcing, can allow companies to do business more efficiently and effectively.
However, knowing how and when to outsource can be complicated. Even outsourcing can be complicated. Companies generally outsource in one of two ways: they outsource a single component of their daily operations, or they establish outsourcing as a strategic part of their business. Apple, as an example of the latter, relies on outsourcing to fulfill their operations model. They design their products internally, and then their contractors operate a complex supply and manufacturing chain on their behalf. In contrast, outsourcing the printing of advertising fliers for your company is simply outsourcing a portion of your daily operations.
Outsourcing is also different from offshoring, which involves contracting work overseas. Any project that you opt against completing in-house falls into the realm of outsourcing. So – how can you strategically build outsourcing into your business plans? The guide below can help you decide how and when to outsource for best results.
The tasks that you choose to outsource may vary depending on your industry. In general, there are two broad types of tasks that lend themselves particularly well to outsourcing:
Pretend, for a moment, that your company manufactures organic fruit snacks. While you need to deliver your product to grocery stores and other outlets, how you choose to do so is unlikely to impact the people who ultimately buy your snacks. Given that there is little strategic advantage to shipping the product yourself, this might be a task that you outsource. If you can ensure that your deliveries will be cost-effective and timely – thus avoiding unnecessary extra delivery and storage fees – outsourcing may be able to help you more efficiently complete this task.
Commodity tasks are also well suited to outsourcing. For instance, many printing companies offer an array of services that come with overnight shipping. In order for you to quickly produce business cards of the same quality as one of these companies, you would have to invest upfront in commercial-grade inks and printers. Or take janitorial services – you can hire full-time team members to clean your office building, or you can leverage the economies of scale that a full-service facilities business offers. The funds that you save on full-time staff can thus be redirected to other areas of your company. Customer service call centers are another example of this kind of outsourcing.
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