Thursday, 10 December 2009

Why good Outsourcing is bad for You and Your business!

Good outsourcing is bad for You and Your business because it has the potential to uncover under-utilised employee talent and force the business to identify, invest and grow its core wealth generating capability.

I have talked to many Operations Managers who simply state we don’t do Outsourcing here because it is bad for business. There is a childlike attitude, which has been ingrained from an early age “this is my train set and you can’t play with it!” and do you know they are absolutely right. You see, even just looking at outsourcing means that you have to understand your cost base to a whole new level of detail, and that exposes the trivia within your business to a level of scrutiny that no manager would be comfortable with.

On a company level there are activities that do not differentiate you in a positive light from your competition; in fact they may even be the reason more people don’t do business with you in the first place! On a personnel level you will probably have your most productive staff spending too much time away from their core wealth generating potential.

So I would like to set you a challenge to prove me wrong, and provide you with a quick Acid test for you to qualify why Outsourcing is bad.

Here’s the easy bit go to your best and most productive employee and tell them that you pleased with their work and you are considering ways to develop then and make them even more successful. Tell them that you are considering outsourcing the mundane and repetitive tasks within their monthly routine and that this will allow them to focus on the more strategic areas that they enjoy about their work. Ask them to:

  • create a bullet point document that highlights the tasks or areas that stop them from being more productive
  • document ways to peel those tasks or areas from the core wealth generating potential so that they can achieve greater productivity and job satisfaction.
  • keep it high level and request a respond by the next day

Set up a meeting over the next few days with your best customers and ask them what they do and don’t like about dealing with your company. The reason I would ask your customers and not your staff is that many of the staff will feel comfortable with the existing processes regardless of how inefficient they are. This applies to existing outsourcing support contracts, and supplier relationships that are in place. Once you have compiled the list you can priorities the key activities that need attention and consider whether they should be outsourced.

So there you have it a quick Acid test to show you why good Outsourcing is bad for You and Your Business. My advice is don’t consider it, stick to the line “Outsourcing is bad for business” unless you want to improve your profitability, increase your productivity and become extremely efficient at providing the service your Customers want. For more Cash Flow Advice go over to