Strategic Outsourcing: How and When To Outsource

Strategic Outsourcing: How and When To Outsource

Picture of Daven Michaels

Daven Michaels

New York Times Bestselling Author, 30-year business veteran, and Executive Chairman of CurrentC Group.

Only very few businesses function independently on their own. What most businesses do is to partner with suppliers and contractors on a regular basis. Outsourcing has become a great way of companies partnering to get things done and this has allowed companies to do their businesses much more effectively.

However, outsourcing can be complicated decision to make as one needs to know how and when to outsource. Even defining and explaining the concept of outsourcing can be in itself complicated. Companies usually outsource in these two ways: they either outsource a single component of their daily operations, or they make outsourcing as a strategic integral part of their business. Apple is an example of companies that uses strategic outsourcing. They rely on outsourcing to execute their operations model. What they do is to design their products internally, and then let their contractors operate a supply and manufacturing chain on their behalf. On the other hand, if you choose to let a company print your fliers for advertising, you just outsourced that portion of your daily operations.

Please note that outsourcing is not the same in meaning with offshoring. The latter involves hiring overseas contractors to get the job done. Any project therefore, that you did not complete in-house can be categorized as outsourcing. The question now is, how can you build outsourcing into your business plan strategically? Read further as this guide helps you decide how and when to strategically outsource for best results.

What to outsource

Your kind of industry will determine what to outsource. To help you out in this, there are two broad types of tasks that you can particularly outsource:

A. Tasks: That really need to do, but are not an important component of your business strategy. If for example, your company manufactures organic fruit juice. While you need to ensure that your product reaches the grocery stores and other sales outlets, how you choose convey them will not impact the people who would ultimately buy your juice. Because there is little strategic advantage when you ship the product yourself, you might want to outsource this task. It would even be more beneficial to you if you outsource, knowing that you can get more cost effective and timely deliveries thus avoiding unnecessary extra delivery costs and storage fees.

B. Commodity tasks: Outsource your commodity tasks. For example, why would you invest in commercial grade printers and ink when you could just outsource the task to a printing company who’d do it for much less and handle all the hassles? Or why not hire outsourced janitorial services instead of hiring full-time janitors and supervisors to clean and maintain your office building? Why invest time and efforts finding, recruiting and training customer service representatives when you could just hire the services of outsourced customer service call centers with all the expertise and the equipment you require to do the job for you?

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.

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