Financial Data
Updated 25 Feb 2020

Should you outsource or employ?

Particular areas of business, such as labour law and people management skills, are generally not an entrepreneur's key strengths. That is why outsourcing seems like the pill that will take all these problems away. But is it?

02 April 2012  Share  0 comments  Print

All the answers to your unique business lifestage questions

Outsourcing might seem like the pill that will take all sorts of hiring and firing problems away. But will it?

Outsourcing is ideal if it:

  • Could save you money in the long term.
  • Offers a short-term solution to a once-off project.
  • Offers a specialised service that would be expensive to employ.
  • Allows you to offer a one-stop-shop service to valued clients.
  • Gives you access to outside expertise and technologies.

But DON'T outsource if:

  • You have adequate internal resources.
  • The project is difficult to manage. Generally, projects that require team interaction don't work well, while self-contained tasks do.
  • You want to abdicate management responsibility - it may take even more time in the beginning as you establish a working relationship and clearly outline service deliverables and client expectations.
  • There aren't clear parameters for costs and over-runs.

Simplify IT

Every aspect of your IT can be outsourced - from office hardware and software through to your network, your Internet connection, website and email.

More companies than ever before are establishing strategic partnerships with outsourcing service providers because it allows them to implement a total IT solution that is tailored to meet their specific needs, but without the headache of having to manage or maintain it themselves.

This is particularly important to you as a small or medium-size business owner, in that it allows you to focus your energies and resources on your core competencies and strategic business goals, while giving you access to technology, expertise and IT support that you might not be able to attract or afford otherwise. It also reduces the costs and risks associated with keeping up with the latest technological advances.

Remember, though, to choose a supplier that has a proven track record, and for whom infrastructure design, installation, support and management is the core business.

Consider the costs

Outsourcing certain responsibilities and jobs in your company can save costs - up to 30% and possibly higher, some sources say.

However, a Gartner research report predicts the opposite, arguing that a number of hidden costs, like higher turnover and setup costs, can dilute the savings of each outsourcing project.

The key is to weigh all the options carefully BEFORE you outsource.Don't underestimate the time required to make an outsourced relationship work.

What can I outsource?

Business functions you might consider outsourcing include:

  • Specialist and expert help (eg, graphic design, multimedia presentations, engineering, bulk mailing, sales and marketing, writing, translation).
  • Public relations services.
  • Virtual assistants (independent entrepreneurs who provide administrative, creative or technical support).
  • E-commerce solutions.
  • Email marketing.
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