Outsource Time-Consuming B.S. to Accelerate Your Business

Why do businesses outsource? There are more reasons than the chorus of “cost cutting” would have it. Obviously, reducing spend may be one of them, but there are many others. It depends in part on what they are outsourcing. Large corporations may outsource key activities, like manufacturing or supply chain management. Other businesses and entrepreneurs may outsource peripheral tasks so they can focus more on core competencies. There are many such tasks that go into running the engine of business each day, such as: bookkeeping, accounting, call-center operations, human resources, logistics and shipping, and infrastructure maintenance — or, if you please: a bunch of time-consuming B.S. (that is, business services).

Business services are, of course, important to any commercial operation, and they must be executed efficiently by knowledgeable professionals; but they’re not the central part of a company’s mission. Any task that is not a company’s core competency is often a task that’s better off delegating, which is why many companies choose to outsource business services.

Defining Business Services and Outsourcing
Business services are tasks that are critical to the operation of a company but do not directly relate to that company’s primary function. For example, CMHWorks’ marketing professionals produce editorial content like this in order to connect with and educate our audience, but our primary function is to provide managed technology, marketing and information security services to small and medium size business.

Outsourcing is defined as, obtaining goods or a service from an outside or foreign supplier, especially in place of an internal source; contract (work) out or abroad.

To be clear: outsourcing does not necessarily mean sending a job to a foreign country; it is simply the hiring of a contractor or agency that is not an official member of your in-house staff. Those team members typically work off-site and they may reside in Bangladesh, New York or 20 minutes from your office.

Today’s outsourcing market is being driven by the “Gig Economy” and offers extreme flexibility and on-demand scaling to accommodates a vast range of possible business objectives. One company may outsource solely to lower wages. Another company may spend more, hour-per-hour, on a highly-skilled outsourced professional for a single project. The benefits of outsourcing include: rapid early-stage growth, economies of scale, faster time to value, competitive advantage, retraining/upskilling, innovation, market differentiation, and more.

Picking Business Services Ripe for Outsourcing
Selecting what to outsource is all about distinguishing your core competencies from your business services. Anything that distracts from working on the thing that makes you competitive in your business vertical is a good candidate for outsourcing. For example, a software company may outsource its accounting to an accounting firm, but would never outsource its programming to the firm’s meagre in-house IT team. Likewise, the accounting firm might outsource the development of its website to the software development shop, but never its accounting functions to the development team.

Some experts advise startups and entrepreneurs to outsource from the beginning. They typically neither have the time or budget to onboard and manage a large team of in-house employees. What’s more, the right balance of outsourced business services and highly-skilled employees can help spur growth, differentiate, and compete with larger, better-funded competitors.

Some signs that it’s time to outsource a particular business service include:

• It does not require a full-time or even part-time in-house employee
• Your in-house employees lack the bandwidth the perform it
• It consumes too much time in proportion to the value it creates
• It is low-skill or repetitive and would be easy to outsource for a reasonable wage
• It requires highly specialized skills that your in-house employees lack
• It needs to be outsourced so employees can retrain or upskill for more advanced tasks
• The cost to acquire the resources is higher than that of the outsourcing provider

IMPORTANT: Don’t guess. Do the math to determine exactly how much value you will be gaining, whether in the form of cost cuts, increased time, or stronger expertise. Identify important metrics and set target hours, rates, and KPIs.

Business from the Outsourced-In
Here are some specific business services companies and entrepreneurs outsource — and their benefits:

Accounting and Bookkeeping: This can be a major help for overworked business owners struggling to transition from transactional processes to more proactive, value-driving business functions. They may keep their CFO and potentially upskill other financial/accounting staff to activities like data-driven business analytics.

IT Development: Outsourcing software development is an obvious choice for both startups and established companies. The needed skills are scarce, and hiring in-house developers is impractical and prohibitively expensive for many. It can take weeks or months to hire a single developer, and salaries can run from $100,000 to $200,000. Also, many developers aren’t actually developing software much of the time, yet you’re stuck paying the negotiated salary. This may explain why the IT outsourcing market in the U.S. is predicted to reach $132.9 billion in 2020.

Marketing and Copywriting: In the age of ad blockers, many companies are turning to original online content to drum up interest and drive sales (and it’s a really good idea). Creating compelling blog posts and web copy requires skill and can be time-consuming, but companies might not need a full-time employee to do so. Many will opt to hire freelance writers to walk the thin line between advert and article. To ensure precise message delivery, it’s recommended that U.S.-based companies opt for native or fluent English speakers for this business service.

Social Media Management: Another key marketing tool for modern businesses is social media. It might not be an obvious candidate for outsourcing — until you see tweets and Facebook posts with little or no engagement and click-throughs. Thankfully, there are pros that know how to optimize content for the different platforms to actually get engagement, which may be worth the fee for some companies. This is a relatively nascent field, so look for a pro with a proven track record.

Information Security: As the threat of data breaches, identity theft and other cyber security requirements increase, more companies need information security expertise. Paying for a dedicated information security employee is expensive. On top of a salary you will also need to pay for training, the basic technologies associated with keeping your business safe, and constant technology upgrading which is inevitable. Outsourcing tasks such as employee training, security policy creation and completion of audits requested by clients, are all items that require specific knowledge and expertise that’s better attained via an outsourced organization.

Project Management: Sometimes, the temptation to dump the whole load in someone else’s lap strikes. At these times, agencies and freelancers in Project Management may fit the bill. Project Managers for software development can be a Godsend. Non-tech business people may be able to spout off a few random ideas about the software they’d like but can’t begin to draw up a start-to-finish blueprint.

Customer Support and Call Center Operation: Answering calls is time consuming, but very important, since those are prized paying customers on the line. Lots of businesses can’t house dedicated representatives, so this is a commonly outsourced business service. Look for a provider with high issue-resolution and satisfaction ratings. Businesses might also desire to outsource website-based live chat to agents who can help turn visitors into leads and, eventually, customers.

C-positions: It is even possible to outsource work to a c-level professional-for-hire. For example, a technologist might contract a CFO to analyze a startup’s financial footing once a quarter. Hiring the same individual full-time, on the other hand, may be totally beyond the means of the founder.

Miscellany: Are there so many small, random tasks crowding your business, you’d like to take them out of their dusty cardboard box and put them for sale on the front lawn? You may need to outsource the whole lot to a versatile Virtual Assistant. VAs can be especially helpful to overworked entrepreneurs or startup founders, taking distracting odds and ends off their plate, so they can nurture their core business.

Consulting: What if you know what your core competency but operate in a crowded market and you’re not sure how to differentiate? A freelance business consultant with a proven track record can help tackle these and other conundrums common to seedling businesses. A few sessions of gap analysis and process optimization can help work out the kinks for founders lacking a business or marketing background — or those who want to level up their strategy.

Faster time to market, scale-up/scale-down flexibility, and competitive differentiation are some benefits of outsourcing software development. In fact, it can enable entrepreneurs of relatively humble means to compete with much larger, better funded companies in their space.

Even companies with some on-premises IT staff may need to outsource projects from time to time if they lack the skills to develop unique functionality — like cloud-native or digital signatures, for example. Software development firms and freelancers can be a huge asset to companies who need high-level development work on a part-time basis single project. When an innovative business idea strikes, they can pull from a large talent pool to immediately begin a software project.

Imagine how much more time and money it would consume to assemble an in-house IT team for the same purpose? In a race to fulfill market need for new software, the company outsourcing development is going to get there before the company hiring in-house or retraining their own IT staff every time.

IT Support: Outsourcing IT support is a great means for companies to free up their own IT staff from the time-consuming chore of fixing every miniscule bug that turns up, so they can turn to innovative tasks that add greater value to the business.

It’s important to look for high rates of tier-one issue resolution and overall client satisfaction, which goes beyond ticket resolution. A great IT-support staff will work to understand your business and to prevent software issues from occurring in the first place.

If outsourcing IT support overseas, be sure to account for the language barrier, time-zone difference, relevant skill level, and “ticket creep,” where support tickets often are not resolved at the first tier and escalate to the second and third support tiers.

IT Core-Competency Controversy
There’s been a bit of controversy over the question of outsourcing software development when it’s your core competency. Purists maintain that no company should ever outsource its core competency. However, there are examples of software companies outsourcing development projects with good-to-exceptional results.

For example, WhatsApp outsourced most of the development of its messaging app so it could focus on administrative and customer-support tasks. It now has 2 billion monthly active users. Granted, this is a rare case, and the prevailing wisdom is still: If you have an idea for a software company, find a skilled technologist to be your co-founder.

Here at CMHWorks, we choose to never outsource our development work (our core competency), and encourage founders who may be playing with the notion, to perform due diligence before deciding on any course of action. We advise that if you opt to outsource, as always, find contractors who view themselves as an extended part of the company and see your success as their own.

How to Find Outsourced Service Providers
There is a huge range in talent, work ethic, and communication and interpersonal skills among outsourced contractors and agencies. They may work by the hour or per project. You will have to do some leg work to really feel them and decide if they’ll deliver what your business needs.

Freelance contractors for hire abound online. Here are some of the top hunting grounds:

• Freelancers advertise their services on many sites, so beginning with a simple Google search is sure to turn up some relevant results.
• LinkedIn.com is a great platform to find all kinds of professionals, and the site now offers LinkedIn ProFinder, specifically for freelancers.
• One of the most convenient ways to find contractors is through dedicated freelancing sites like Upwork.com, Guru.com, or Freelancer.com.

Aside from individuals, agencies can be also a good choice for some types of work, especially when a number of individuals are needed to work as a team on a project, such as website development. Watch out for “mills” that do a great volume of business, hastily handing off projects to overworked subcontractors who aren’t given adequate time or funds to get to know clients enough to meet their needs.

The above-mentioned resources — Google, LinkedIn, and freelancing sites — can also be leveraged to find agencies. Sites like Upwork and Guru provide detailed breakdowns of hourly rates as well as client reviews.

Some Tips for Hiring and Working with Contractors

• When hiring contractors, pay close attention to feedback from their past clients.
• Ask all questions that are pertinent to your business and your needs — even if they’re unconventional. Interview them as extensively as necessary — via text, over the phone, or on a Zoom call — until you feel good about hiring them.
• Communicate your expectations and all elements of the job description fully; don’t leave anything to assumption, and don’t expect the contractor to read your mind. Tell them, and then tell them again, what you need them to do or deliver.
• Give them a bit of leeway to get the hang of things; they may not perform all tasks perfectly right out of the gate, but give them some time to improve. Just make sure to track their progress. Also, measure the amount of time you spend explaining and instructing; if it isn’t sufficiently below the time you’d spend doing the task yourself, you’re defeating a chief purpose of outsourcing.

An Outsourced Job Well Done
There are as many reasons to outsource as there are businesses and business goals. Cutting costs may be one; access to expertise — even at a premium rate — for an important one-off project may be another. The benefits can ripple throughout a business. Removing low-value tasks from a company’s agenda can make time for upskilling. Tapping scarce technology talent can help businesses innovate and gain a competitive digital advantage. Strategic outsourcing can give small startups entry into markets dominated by bigger competitors. All may be surprised at how much more successful they can be by drudging less and delegating more.

Contact CMHWorks to learn more about outsourcing your managed IT services, marketing, product support, information security and more.