Are You Outsourcing Too Much?
Written by Jay Shapiro for Gaebler Ventures
Have you lost touch with the workings of your own company? Are you suddenly receiving complaints from customers about poor service or products? You may be outsourcing too much.
Outsourcing can provide a cost effective solution to a wide variety of business problems such as staffing problems and manufacturing pressures.
There are pitfalls however and it's worth evaluating where your company sits and its overall functionality when it comes to appraising if outsourcing is helping or hindering your progress. You might be the sort of business owner who prefers to keep it hands on rather than hands off.
Do you feel you have lost too much managerial control?
If you have contractually agreed to have your outsourcer perform certain tasks for you then you have in effect signed away your right to control how that happens. The difficulty here is that while the outsourcer may provide the basic service they are less connected to the business. If you feel powerless and that things are out of your control you may well be outsourcing too much.
Is your outsourcing bill too high?
It's not just the outsource service that you'll be paying for. There will be legal fees whenever there are contracts involved. And if you find you're paying extra to your outsource provider then it may be that you are shipping out too much work. If your company can't afford to pay then you can't afford to outsource this much.
If both of the above issues resonate with you then you may be paying for little more than losing touch with your business. Many business owners find that outsourcing isn't for them. This is especially true of companies who pride themselves on offering a personal tough with their services and products.
Seeing your business at grass roots level
An exercise which many large retail companies carry out with their regional managers is that of putting them on the shop floor. Although many started there it is often years since they've seen the business at grass roots level. This exercise usually works well as it affords the manager the chance to understand staffing problems, how customers perceive the chain, etc. With first hand experience the manager is better able to make decisions that will really benefit the company and how it operates. Trying to oversee the situation from a remote position and view point rarely works.
Is lack of connection too large a sacrifice?
That's one of the disadvantages of a business that relies heavily on outsourcing, there is an inevitable lack of hands on experience and the loss of connection and control is something which a lot of business owners feel is too large a sacrifice to make in the name of so-called convenience or increased production rates.
Has quality of service or product declined since you outsourced
One of the major pitfalls of outsourcing is that lack of control and a hands-on approach can mean that the quality of service or products can slip before you know about it. Worryingly it will be your customers who first realise that things aren't what they used to be. While outsourcing might be allowing you to create and sell more product, if the increase in quantity means a drop in quality it may be that you are outsourcing too much or at the very least, not using the right companies to handle your work for you.
Jay Shapiro is a freelance writer based in the UK. Jay has a particular interest in the emotive aspects of the entrepreneur's character. "Alongside the nuts and bolts of business, the character of the person is often the ingredient responsible for success."
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