"Making Sense of the Outsourcing Dilemma."

Since the early 80’s outsourcing has presented itself in a variety of business practices. As companies grow and practices change, eventually the decision will have to be made whether to outsource manufacturing or services in order to remain competitive or gain an advantage over the competition. Even the smallest of companies employing ten or fewer employees face the dilemma of outsourcing in their infancy of business operation similarly to large corporations that employ hundreds or thousands of employees.

Likely the first opportunity a small business encounters in respect to outsourcing will be payroll and or uniform services. Whereas large corporations employing hundreds or thousands of employees may contemplate outsourcing other services such as food/vending services, custodial or manufacturing services the same factors exist in the decision making process regardless of the purpose for the outsourcing. The two factors every influencing every outsourcing decision is the effect it will have on the realized gain in either efficiency or profitability.

Seven business elements that have demonstrated mutually beneficial outsourcing outcomes for business include:

• Controlling Costs or Cost Saving – Companies will outsource to a vendor that can provide a specialization in a specific function and can perform that function more efficiently that the manner in which the company could perform the function itself.

• Staffing – Some companies may keep a skeleton crew of employees and outsource to temp agencies only when the demand is greater than the core crew can manage.

• Focus on Core Business – Eliminating distractions is essential for the small business owner that must always remain diligent to the core business responsibility and continual business growth opportunities.

• Morale – Morale will often increase when an expert in the field performs specific responsibilities in a business instead of frustrating employees attempting to complete a task they are untrained or unfamiliar with performing.

• Flexibility – Flexibility typically relates to the financial aspect of outsourcing. Flexibility in allowing the potential sale of assets, cash flow, and consistency of billing for services.

• Knowledge – Expertise in a particular field can instill a greater competitive advantage. Small companies may utilize an IT professional to ensure the cutting edge advantage. Large companies may utilize a food service or medical contractor to ensure quality, proper execution of services, and cost control.

• Accountability – The company as well as the vendor honoring the contractor agreement understand the nature of outsourcing and the business impact involved for each is crucial for maintaining the relationship. Companies as wmust honor their obligation

Assessing outsourcing opportunities against realized gain can be challenging for business owners. If you would like support in assessing the “Outsourcing Dilemma” in your business, we are eager to team together with you to get the results you desire. Visit our website at www.themeritgroupindy.com or call 317-805-4896 today!

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