You know how it is with running a business. You’ve got your main LOB, the thing/s you’re really great at. But then there are other necessary tasks that, while important, might not be your team’s superpower.
Instead of stretching yourselves thin trying to do absolutely everything, it often makes sense to bring in external professionals or teams who specialise in those areas. You need to be smart with your resources.
One of the most repeated benefits of using outsourcing strategies is how it helps make your business more efficient and productive. A Forbes piece even backed this by sharing that outsourcing busywork lets your business zero in on more strategic efforts that will drive your growth.
So, instead of getting bogged down in tasks that aren’t your main thing, you can partner with experts who can handle them smoothly. But how do you actually go about setting up these partnerships effectively?
Let’s figure out how to build outsourcing strategies that actually deliver results.
Table of Contents
- What is an Outsourcing Strategy?
- Benefits of Having Outsourcing Strategies
- 7 Steps to Build Successful Outsourcing Strategies
- Common Outsourcing Planning Challenges and How to Solve Them
- Measuring Outsourcing Benefits Beyond Cost
- Outsourcing vs. In-House: Making the Right Choice
- Team Roles When You Outsource
- Have the Right Partner as Part of Your Outsourcing Strategy
- FAQs
What is an Outsourcing Strategy?
When a company thinks about outsourcing, it usually starts with a clear plan. This plan, aka the outsourcing strategy, says exactly which parts of the business they’re going to hand over to outside companies.
It also spells out what they hope to achieve by doing this, how they’ll pick the right partners, how they’ll work with them, and how they’ll know if this move is working.
A good outsourcing strategy ties into the company’s bigger goals, whether that’s to get things done more efficiently, save money, tap into specific expertise, or let their own team focus on other things.
Deloitte did a survey recently and found that many business leaders, 57%, say they outsource to save money. But a really solid strategy looks at more than just the cost. It thinks about how it will affect the business down the road.
Benefits of Having Outsourcing Strategies
Having clear outsourcing strategies brings several advantages to a business:
Cost Efficiency
Firstly, saving money often comes to mind when we talk about outsourcing. It can definitely make sense financially, especially when you tap into skilled workers from different places where labour costs might be lower.
Access to Specialised Skills and Expertise
Sometimes you need a very specific set of skills that your current team just doesn’t have, particularly in dynamic fields like tech or marketing.
Instead of spending ages trying to train someone, you can just partner with ready-to-go professionals who already have the relevant skills and experience. It’s like bringing in a specialist when you need one.
More Time for Core Competencies
Having a comprehensive outsourcing strategy to delegate the tasks that aren’t your core business lets your team concentrate on what makes you, you.
When you’re not overwhelmed doing everything else, you’ve got more headspace for the stuff that actually propels business growth.
Better Agility
Things change, right? When you outsource, it gives you the ability to adapt and scale operations much more easily. You can adjust your agreements without the long-term commitments that come with hiring full-time, local staff. This flexibility can be a real advantage when the market shifts.
Heightened Efficiency
Finally, when you team up with specialists, they often have streamlined processes and tools that can boost the quality and speed of the work. They focus on that specific thing, so they tend to be pretty good at it.
7 Steps to Build Successful Outsourcing Strategies
Building successful outsourcing strategies requires a systematic approach. Here are six key steps:
1. Identify What to Outsource
First things first, think about what really makes your business tick. Those are your core activities. Then, consider the other stuff that keeps things running but isn’t necessarily your specialty.
Things like processing payroll or maybe even handling customer queries could potentially be done really well by someone else who specialises in that.
For instance, your actual product development is likely core, but managing the office supplies probably isn’t.
2. Define Goals and KPIs
Before you even peek at outsourcing options, nail down what you’re hoping to get out of it. Are you trying to save some cash, give customers better support, or just get things moving quicker?
Having solid, trackable goals makes it way easier to see if outsourcing is actually working for you, and to make tweaks if it’s not.
3. Choose the Right Outsourcing Model
There isn’t just one way to outsource. You could team up with folks across the ocean (that’s offshoring), in a nearby country (nearshoring), or even with a company right here at home (onshoring).
Then there’s the option where someone basically takes over an entire area for you (managed services), or you get a dedicated team that feels like your own crew, just external.
What works best really depends on your budget, how complicated the project is, and how much you want to be in the driver’s seat.
4. Find the Right Partners
When you’re on the hunt for an outsourcing provider, you’ve got to do a bit of digging. Look for companies that have a solid history of doing good work, have experience in the area you need help with, and have happy clients who’ve said good things about them.
Think about what’s important to you. Do they really know their stuff? Are they good at communicating? Do they take security seriously? And would you say they’d be a good cultural fit with your team?
5. Clearly Define Scope and Expectations
Once you’ve picked an outsourcing provider, make sure everyone knows what needs doing, when it needs to be done, and how you’ll know if it’s a success.
A solid contract that spells out all the details (that’s where those Service Level Agreements, or SLAs, come in handy) is key so everyone’s on the same page about what’s expected.
6. Focus on Communication and Collaboration
If you want outsourcing to go smoothly, good communication is a must. The usual drill is to set up regular check-ins, use tools that help you collaborate, and make sure your external team understands what you’re trying to achieve. It just helps everyone work better together.
7. Monitor and Adjust
Outsourcing isn’t something you just set up and forget about. Keep an eye on whether you’re actually hitting the targets you set out to achieve. If something isn’t working as well as you’d hoped, be ready to make changes to your approach.
Common Outsourcing Planning Challenges and How to Solve Them
Some hurdles tend to appear fairly often when you’re putting together outsourcing strategies. But don’t worry, they’re usually manageable.
Here are some common sticking points and some quick ways to think about solving them:
Measuring Outsourcing Benefits Beyond Cost
This one can feel a bit fuzzy because you’re not always looking at direct dollar amounts. But you can still see the impact.
Look at the benefit of better access to expertise and think about the results. Are you seeing higher-quality work in that outsourced area? Are you getting access to knowledge or technology you didn’t have before?
You could track things like the improvement in customer satisfaction scores if you outsourced customer service, or the faster development cycles if you brought in specialist tech help.
To see if handing off work actually gives you more time to focus, look at what your internal team is now able to achieve. Are they tackling strategic projects that were always on the back burner? Is there a noticeable increase in innovation or proactivity?
While you might not have a precise metric, you’ll likely see these positive changes in your overall business performance and potentially through feedback from your team. It’s more about observing the impact of that expertise and freed-up time.
Outsourcing vs. In-House: Making the Right Choice
This is where you need to put on your analytical hat. You’ll want to look at the direct costs, of course. What would it cost to do it in-house versus what the outsourcing vendor is charging? But don’t just stop there.
Think about the indirect costs and benefits, too. For example, keeping it in-house might mean investing in new training or hiring more staff, which comes with its own set of costs. Outsourcing might have costs beyond the vendor fees, like the time spent managing the relationship.
On the benefits side, outsourcing could give you access to better technology or faster turnaround times than you could achieve internally right now.
It’s about weighing the total cost of ownership and the potential strategic advantages of each option.
Sometimes, even if outsourcing isn’t dramatically cheaper, the access to specialised skills or the ability to scale quickly can make it the better choice.
Team Roles When You Outsource
This is where a really clear outsourcing strategy is crucial. When you decide to outsource certain tasks, you need to clearly communicate to your internal team why you’re doing it and how it affects their roles.
If, say, you outsource your social media management, your marketing team needs to understand what their new focus will be. Are they now concentrating on content creation strategy instead?
Regular communication and perhaps even some training or workshops to clarify the new roles can really help smooth this transition. A good strategy includes a plan for internal communication and role definition right from the start.
Have the Right Partner as Part of Your Outsourcing Strategy
Ultimately, the make-or-break part of your outsourcing strategy is landing the right partner. You’re looking for someone who actually gets what you’re trying to do and is keen to build something lasting with you. Think of it less like just getting someone to do a task and more like forming a real, strategic connection.
So, when done thoughtfully, coming up with outsourcing strategies is not an admission of weakness. It’s a smart move towards a more efficient and impactful operation. So, what part of your business could be amplified by a strategic partnership?
FAQs
How do I make outsourcing successful?
If you want outsourcing to really work for you, a few things matter. First off, get crystal clear on why you’re even thinking about it. What’s the goal?
Then, take your time finding the right provider to work with. Skilled experts, sure, but also someone who talks to you straight and feels like a good match for your team’s vibe.
Moreover, make sure everyone knows exactly what’s expected, and keep communication lines open.
What is the strategic outsourcing model?
Strategic outsourcing goes beyond simply cutting costs by offloading tasks. It’s about leveraging external expertise to give your business a competitive advantage.
Think of it as a long-term, thoughtful approach: Where can outsourcing drive innovation, bring in fresh ideas, or free up your internal team to focus on what they do best?
When done right, strategic outsourcing isn’t just efficient, it’s a smart way to accelerate growth and sharpen your business’s core strengths.
What do outsourcing strategies involve?
An outsourcing strategy is basically your plan of attack for using outsourcing. It includes figuring out what you’re going to outsource, what you hope to gain from it, how you’ll pick the right partners, how you’ll all work together, and how you’ll know if it’s paying off.