Business outsourcing is when a company hires an outside source to complete work or a project which would normally be done by the staff. Outsourcing has become popular as a solution for a business to save money and complete projects and tasks without having full time employees do the work.
Companies might consider business outsourcing for many different reasons. A company might consider outsourcing to save money by cutting down on costs, or they might not have the employee resources to complete a particular project.
Outsourcing gives a company the opportunity to complete a crucial project by people who are not their employees. This means they don’t have to pay a salary or provide benefits to them.
When a company business decides to outsource a project, it will usually enter into an agreement or contract with the outsourcing company. The contract will include the terms of the agreement, like the steps taken to complete the project, the time the project will take, people involved, cost, and required resources from the client.
There are many different types of outsourcing for many different business segments. The most common segments of a business that hires outsourcing companies for assistance include accounting services to help with payroll, inventory, and financial issues.
The biggest field of outsourcing for companies today is in the Information Technology field. This is because companies frequently need to upgrade their phones, computers, need cabling installed, troubleshooting, programming and more. Companies also outsource people for customer service positions, call centers, and telemarketing.
Reasons To Consider Business Outsourcing
There are many reasons you might consider outsourcing for your company. Many of these reasons might include the resources, cost, or staff. If you are a growing company or are upgrading systems, you will have many projects you need to complete simultaneously for your expansion.
You might not have a staff that knows how to complete the project or your staff may not have enough people to complete the project in the time frame you would like it to be done. Outsourcing is an excellent option when you face issues like this. An outsourcing company can come into your business and complete the project on your required deadline.
Another reason you might consider outsourcing is to save money. You might currently have full-time employees in positions that only require them to be around for certain times of the year. It is cheaper to eliminate the full time employee position and bring in the outsourcing company only when you need them to work.
When you bring in an outsourcing company to complete a project rather than hire a full time employee you are saving on the yearly salary and the benefits you would have to offer that employee. In most cases, it is usually cheaper to hire an individual or team of people on a temporary basis than it is to use your own staff.
You might have a full-time employee you need for one specific task, but that has a lot of downtime. So you have to find work for them to keep them busy. There is often no reason to pay a full-time employee if you can hire someone only for the duration you need them.
Business Outsourcing Contracts
When you consider business outsourcing it is important to draw up a contractual agreement for you and the outsourcing company to sign. This is to protect your company and the funds you have for the project.
The contract will spell out all of your expectations to the project and what the role of the company and their employees will be. It will define the project in full including items such as the time line, budget, people, and more. This gives you the opportunity to hold the company accountable for the work you are asking to be done.
When you sign a contractual agreement for business outsourcing the contract will specify the time frame of the project and set a timeline. The timeline will set milestones during the project and specify each with an expected completion date.
This includes the amount of hours it takes for completion of the project. If the company promised the project would be completed in a certain amount of hours and it is not then their staff will be working for free until the project is completed.
In addition, many contractual agreements will specify percentages of payment according to the completion of each set milestone. If the completion or the milestone is not met on the expected date, a stipulation may be defined on the contractual agreement also.
The contract signed between you and a business outsourcing company will define the budget of the project and what the company has agreed to do the project for. If the company has underbid the project, then they must pay the excess funds to complete the project. It is not your responsibility if the company underbids, and the contract should be clear on this.
Maintaining Quality Of Service When Outsourcing Projects
If you have poorly defined your contract with a business outsourcing company, the quality of the project may suffer severely. You don’t want your business to suffer because you were not clear about how the project needed to be done and now have a completed project that makes your customers very unhappy.
There are many safeguards you can put in place to ensure that the project meets the expected quality requirements when you’re using a company other than yours. When you define the objectives for the project you want completed they need to be defined clearly and everyone needs to acknowledge that they agree to them. Being too picky is better than not being specific enough.
If you end up forgetting certain things and not specifying them you’re opening a door for poor work to be done. When this happens, you cannot request it be changed and done a different way, because it was not specified in the contract. In this case you’ll end up making additional payments to have things done the way you want because you didn’t properly specify it in the contract.
The specifications for the project should never be written by just one person. Projects need to be written by everyone involved and affected by the project. You need to be sure you don’t miss anything that might cause poor quality with the project.
If you need to research the equipment and how it works then you should. Many people can be affected by poor quality in a project, such as your employees who are using the equipment. Shareholders and stakeholders also have a vested interest in ensuring that the money spent on an outsourced project is being spent well.
Powered by Facebook Comments