Role of Outsourcing: What to do before Outsourcing.

If you are a business owner, chances are you’ve considered outsourcing services to help your company grow.

Outsourcing can provide great value for money by allowing companies to focus on their core competencies, access specialised expertise and technologies, and reduce labour costs.

The specific value for money that a company can achieve through outsourcing will depend on various factors, including the company's outsourcing strategy, the capabilities of the outsourcing partner, and the nature of the work being outsourced.

You can also take a look at an article on our website on how outsourcing can help drive growth for your business.

From understanding the risks and rewards of outsourcing to researching potential vendors, these top 5 essential steps will help you make the right decisions for your business.

1. Identify Your Outsourcing Needs

You’re probably eager to start outsourcing as many processes as possible. However, it’s important first to figure out which needs you want to outsource.

You can outsource many different business processes, including HR, marketing, IT, accounting, and more.

Before deciding which processes to outsource, you’ll need to identify your outsourcing needs. It would be best if you outsourced only those processes that are negatively impacting your business.

For example, if your marketing efforts are struggling but your accounting department is doing great, it probably doesn’t make sense to outsource your accounting needs.

Before deciding which processes to outsource, you’ll need to identify your outsourcing needs. Your needs will also vary based on your business and stage of growth.

2. Research Potential Vendors

Once you’ve identified the processes you want to outsource, it’s time to start researching potential vendors.

While you can outsource almost any business process, start with the processes that make up the largest portion of your budget.

You can save outsourcing smaller processes for later. To find potential vendors, start with an internet search.

You can also speak with industry experts and other business owners to find vendors that might be a good fit for your company.

You’ll want to make sure that each vendor meets your company’s requirements and has a proven track record. Once you’ve found a few vendors, it’s time to get the ball rolling.

At BSO, Our name is our promise. Stakeholders in South Africa (banks, financers, insurers, auditors) trust the integrity of our work.?

We deliver everything a business needs to optimise financial health and performance, minimise risk and ensure the board and management are prepared for anything.

3. Understand the Risks and Rewards of Outsourcing

Even though outsourcing can be a great way to grow your business, it does come with risks.

Before outsourcing any of your in-house processes, you’ll want to understand these risks.

• ?Rising Costs: The most obvious risk is that outsourcing can significantly increase your operating costs. While this may not be an issue if your company is experiencing significant growth, it could be if you are starting. Additionally, if you are outsourcing to save money and your business doesn’t grow as expected, those savings may not be enough to cover your additional expenses.
• ?Lack of Control: When outsourcing, you allow another company to access your data and employees. If something happens to your data or your employees aren’t being treated ethically, you won’t be able to control the situation. This is a risk that many businesses aren’t willing to take.
• Lack of Expertise: Outsourcing specific processes to specialists can help grow your business and increase efficiency. However, if you don’t know what you don’t know, you will lose some control over those processes.

4. Write an Outsourcing Contract

Once you’ve found a vendor that meets your company’s requirements, it’s time to start drafting an outsourcing contract.

You’ll want to ensure that the contract covers all the important details, including the vendor’s services, how much you’ll pay, and a detailed explanation of your needs.

Even though you’ve already communicated with the vendor about your needs, it’s a good idea to include them in the contract.

Drafting an outsourcing contract is important because it clearly defines the responsibilities, rights, and expectations of both parties involved in the outsourcing agreement.

?It helps to establish a clear scope of work, outlines the terms of payment, and lays out the processes for handling disputes or terminating the contract. It also helps to ensure that the outsourcing relationship is conducted legally and ethically and helps to protect the interests of both the outsourcing company and the company outsourcing the work.

Overall, an outsourcing contract helps to establish a clear and legally binding agreement that both parties can rely on to guide their actions and protect their interests.

5. Set Goals and Expectations

Before you start outsourcing services, you’ll also want to set goals and expectations.

This is important for a few reasons.

First, it will help you decide which processes to outsource. Second, it will help you determine what type of vendor to hire. For example, if you outsource your marketing department and want to generate leads, you’ll want to find a vendor specialising in lead generation.

Setting goals and expectations will also help you hold your vendors accountable. If you find that your vendor isn’t meeting your expectations, you’ll know when it’s time to fire them and find a new vendor. Before outsourcing, ensure all your vendors know your expectations.

You don’t want to find yourself in a situation where you don’t hold your vendors accountable, which costs you more money or damages your relationship with them.

Another factor to consider is that once you start outsourcing services, you’ll want to continue monitoring and evaluating those processes.

This will help you identify areas for improvement and the need for change. You’ll also be able to track the progress of each vendor and their ability to meet your needs. This will help you determine when it’s time to replace your vendors.

Outsourcing can allow a business to focus on its core competencies, increase efficiency, and save money, allowing it to grow and compete more effectively in the marketplace.

Whatever your need, BSO’s focus is on cost saving, improving efficiency and optimising systems. So, our initial approach is to help identify the areas where we can add value, and then customise services to deliver.

Contact us for more information on where to start your outsourcing journey.