Why Outsource

Outsourcing or availing yourself of the services of a virtual assistant or a person or a team that is not part of your business organization is a relatively new concept. If you are still wondering about the wisdom of outsourcing, this article will try to put to light the various considerations why some people outsource.

Outsourcing is economical in the long run, if not the in short run. By outsourcing, you free yourself from the financial obligation of paying for the overhead and manpower costs. You just pay the fees based on certain agreed upon measures, e.g., every hour expended in the project, number of pages of finished product, or an agreed upon amount for the whole project or a percentage of the cost of the project. If you rented an additional office space, bought the required office equipment and hired the needed employees to complete a project, you would still have to pay the cost even after the project had been completed. By outsourcing the project, your expenses end with the payment of the outsourcing fee.

But what if there is an excess office space, office equipment that is readily available for the project and employees with spare time? Will outsourcing remain a viable option? Maybe not as much but this is where the other considerations will have to enter the analysis. Do the employees have the necessary skills or expertise to efficiently perform the tasks? If not then outsourcing may be evaluated vis-à-vis training the employees expending both time and money. What would be the repercussions of a less than acceptable finished product due to lack of expertise by the employee who performed the task? Will it result in losing a significant account or will it just require rework and additional expenses?

Outsourcing frees you from paying the costs of fringe benefits that a full-time employee is entitled to like life and health insurance, retirement plans, vacations, etc. While the expenses may be affordable on a year-to-year basis, in the long haul, after the completion of the project, they continue to remain in the books and the amount can be significant. If you are operating in a country where labor laws make it difficult, if not impossible, to terminate an employee whose services are no longer needed, then the cost of settlement should be factored in. Outsourcing, then, becomes a highly preferred option.

Outsourcing enables you to instantly tap the expertise of people you do not have in your business organization. Such expertise may require a considerable amount of time and money to develop in-house, a luxury you may not have during the project period. The cost of developing an employee is not confined to the training expenses alone. After the employee has completed the training and has acquired the needed skills, his compensation has to be commensurately adjusted to correspond to his enhanced marketability. Otherwise, he might be tempted to leave you for other companies that are willing to pay the perceived just price. Even if there is a stiff penalty for transferring within a specified period from the completion of training, if the other company is willing to pay the penalty, you may still lose your newly developed employee. Outsourcing saves you from this seemingly no-win situation.

Outsourcing enables you to accept tasks or projects even if you still do not have the corporate infrastructures to perform them. Virtual assistants multiply your capability and put you in a position to accept bigger responsibilities even if your organization is still very young. This enables you to effectively compete with more mature business organizations even before you have developed your in-house resources. In effect outsourcing accelerates your corporate growth.

Finally, outsourcing allows you to focus more on the utilization of your core competencies. By hiring a virtual assistant to do the extraneous activities, you and your team can focus on the activities that you do best–taking care of your clients. In effect outsourcing makes you more effective.

The present global economic crisis has created a tremendous pressure on any management to develop and implement strategies that call for a no-nonsense financial discipline and lean and efficient corporate organization. If a task can be done in a more efficient way, then there is no justification in doing it in any other way. Modern technology in communications has opened possibilities of doing things in a manner never imagined before. Twenty years ago, it would be inconceivable for a call from a client in the US to be handled in the Philippines.

Moreover, unwanted organizational fats should have no place is such strategies. Hiring full-time employees to perform tasks in a short-duration project should not even be considered. Outsourcing should be a part of such strategies. The battle cry might as well be“Outsource or Die”.