Outsourcing

“Outsourcing” is a powerful word. For some, it is a means for business survival and a model of efficiency. For others, it’s associated with job loss and diminishing power. At its core, however, is a process by which a business analysis is undertaken, non-strategic tasks or bottlenecked processes are identified, and alternatives to those tasks and processes are sourced from trusted partners.

In a completely closed domestic market, everyone in an industry shares the same average labor costs, which puts everyone on equal footing. In a global economy, everyone has the access to the same pool of potential revenues, but for those whose expenses are lower, profits are accelerated. If a business operates in the global economy, it has virtually no choice in seeking lower cost alternatives for non-core functions.

But what about the local business, whose only market is the community it serves? Does outsourcing apply to it? Unfortunately, global economic forces manifest themselves just about everywhere. Technology has not only removed the barriers to doing business globally, but also to doing it locally. Customers have access to options and information far beyond their local community, and have demonstrated their willingness and desire to act on those options.

For local businesses, this means that they must think and behave like global players, examining their own operations to determine which functions are not central to their offering or not performing to expected standards, and focusing maximum energy on those that are.

Which brings us back to outsourcing. As many have realized, it can be an empowering and personally fulfilling option. With outsourcing, employers have the ability to work with staff to identify key skills and abilities and in many cases elevate their positions and responsibilities. Staff feel much more valued and knowledgeable in their chosen profession, with much less time spent on unfulfilling, repetitive tasks that would be viewed as a commodity on the world market. Also, more creative and strategic relationships can be formed with customers, and operations can become much less complex.

Other benefits include:

• Lower costs (due to economies of scale or lower labor rates)
• The ability to scale operations to the business opportunity
• Greater volume of work can be done efficiently and effectively
• Increased flexibility to meet changing business and commercial conditions
• Lower new investment in internal infrastructure
• Access to innovation and thought leadership

Without question, there are issues that must be addressed to ensure a smooth, efficient, and seamless transition to outsourced services. They include:

• Have key executive and mid-management personnel bought into the concept? Do they accept that outsourcing is not meant simply to replace staff at lower cost, but rather to ensure the continued competitive health of the company, which will benefit all employees, while at the same time providing a more meaningful and rewarding work experience?
• Is the outsource service provider knowledgeable about the local market where the services are to be performed? Does it know and conform to the local customs, business environment, and local laws?
• Are outsource workers using technology that is compatible with or better than your own? Do they have the education and training to maintain and enhance service levels? Are there enough workers to handle your service requirements?
• Are outsource workers operating in a time zone that is compatible with your own?
• Are there checks and balances in place, a thorough understanding of business rules, procedures, and systems, and accountability?
  
  

In the end, it’s about remaining nimble, flexible, and responsive. It’s about playing to your strengths, and creating a work environment that recognizes and capitalizes on the true value of its employees. And it’s about surviving and flourishing in a turbulent, global economy.

KiSP Inc. is a pioneer in providing outsourced services in Specification and Space Planning, 3D Rendering, and Sales Quotation preparation for the contract furniture industry. Contact us for additional information.

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