Magazine Article | December 1, 2018

6 Questions To Ask When Deciding What To Outsource And What To Do Yourself

Source: Software Executive magazine

By Ross Colomb, VP of Operations, Strategic Outsourcing, 1Rivet

Each time you need to add a service for an internal or external client, you have a choice: You can do it yourself, or you can hire someone to do it for you. These six questions can help you decide which of those two choices is the right move.

1. AM I A LEADER IN THE FIELD?

It takes effort, insight, and a bit of luck to become a leader in any field. Once you achieve that status, hang on to it because it’s valuable. Never outsource a task or service that people come to you for because you’re the best at it in the industry — unless you’re losing money doing it!

2. AM I BIG ENOUGH TO GROW AS FAST AS I WANT TO?

When you’re a small software company and want to expand fast, having a partner with a national footprint can be a shortcut to growth. Let’s say you have a fabulous new software idea in a competitive niche. If you don’t have a deep IT bench, outsourcing development can give you a faster turnaround or help you hit a particular price point. You can outsource the help desk (because no matter how great the software is, you know its end users will need support). You can outsource sales to a national company that hits the streets the day after you sign the contract.

3. CAN I AFFORD TO BUY THE SOFTWARE, HARDWARE, OR EQUIPMENT WE NEED?

Usually essential software, hardware, or equipment requires a significant capital investment. You need access, but you can’t afford to buy and run it inhouse because the ROI doesn’t justify the cost. It can be cheaper to contract with an outsourcer who already licenses the software, hardware, or equipment than to buy it yourself.

4. HAVE I FAILED TO RESPOND TO SIGNIFICANT SHIFTS IN THE MARKET?

Let me give you an example: Retailers and organizations sometimes have overstaffed call centers because their customer base previously phoned in with support requests but now the clientele submit their own requests via an online self-service portal.

By outsourcing the call center, they can still have someone answering the phone when it does ring. An IT consultant, meanwhile, can create a new workflow geared toward online self-service versus dealing with a phone representative.

5. CAN THIS FUNCTION BE OUTSOURCED?

Anything can be outsourced, including support functions such as accounting, HR, compliance, corporate leadership, and even front desk employees. Everyone will assume the front desk staffer is an employee, but with the high turnover and lack of career opportunities, it’s a good position to outsource.

6. ARE THE PEOPLE PERFORMING OUR SUPPORT FUNCTIONS A PART OF THE FAMILY?

The best reason to not outsource is that the people who do the job now are an important part of your team. They don’t just do the mail, copy center, and conference room — they’re part of the family, or they’re the heart of the company. If outsourcing someone’s job will significantly damage morale or change the company culture for the worse, don’t do it.

ROSS COLOMB is VP of operations, strategic outsourcing for 1Rivet. He has nearly two decades of experience working in the facilities management and office services industry after having served two tours of duty with the U.S. Navy.