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Outsourcing can be a strategic tool for making your business more
productive and profitable - if you know when to take advantage of it.
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Consider the following criteria
when deciding whether to outsource:
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The activity isn't central to generating profits or competitive success.
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The job is a routine one that wastes valuable time and energy.
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The task is a need that's only temporary or that recurs in cycles.
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It's less expensive to have someone else do it than to do it in-house.
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The activity can be done cheaper in-house, but drains resources that could be
better used elsewhere.
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The skill required is so specialized that it's impractical to have a regular
employee do it.
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The activity isn't one that people enjoy doing.
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Outsourcing is a viable option for everything from payroll,
accounting, manufacturing and delivery to customer service, employee training,
property management and computer services. The key advantage of outsourcing is
that it enables you to invest your resources into more profitable activities.
Companies, however, should be careful not to outsource functions that appear
negligible, but that are actually essential, such as customer service
operations in a small business that relies on building rapport with a loyal
customer base .
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Once you've decided to outsource a particular area, here are some tips for
finding and working with a company that's right for you:
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1. Do your homework: Ask companies in your area for recommendations on
good outsourcing firms, and search the Internet for a more comprehensive list
of services available. Ask the companies you research to give you client
references, and interview these clients to find out how reliable and flexible
their services are.
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2. Select a compatible company: Choose a company that understands your
needs and can accommodate them. Devise a contract that allows you to adjust the
terms of the agreement to suit unforeseen changes. An arrangement that's
satisfactory now may not work in the future if the company expands or
competition increases.
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3. Establish the standards you expect: Outsourcing will mean the loss of
direct control and supervision, so communicating the standards of performance
you expect is a must. Outline these standards in the contract in detail, and
check up on the company periodically to make sure that it's doing its job
correctly.
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4. Arrange for constant communication: Schedule regular meetings with
your outsourcing people to stay informed and discuss the day-to-day problems
they've encountered. By staying aware of what's going on, you can prevent
potential problems and improve how your business operates.
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5. Secure insurance for emergencies: Make sure you have a backup system
in place in the event that the outsourcing company can't carry through. An
accounting service, for example, should provide your company with a copy of
backup records or store them in a separate location.
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