Outsourcing your business effectively

OUTSOURCING is a business practice of hiring another party to perform certain jobs that were previously done in-house. It allows the business to focus on its core activities, while contracting out other tasks to a service provider, who may be able to handle the outsourced jobs more efficiently. Businesses can outsource a range of tasks, such as payroll, call service, IT services or bookkeeping. What are the best strategies to adopt, when it comes to outsourcing? Mentor John answers your questions.

We have decided to outsource certain non-critical tasks to reduce costs. We may have to let go some staff. How do I maintain high company morale, especially as employees will need to collaborate with the soon-to-be-appointed service provider?

First, think very carefully about outsourcing. It became a fad for a time and it can certainly reduce costs. It can also let you down to a point where your client blames you for reduced standards, but you cannot effectively get any redress from your supplier. Be very certain that the supplier you outsource to is: honest and will not steal your ideas; is efficient and has Plan B if his systems fail; and is going to make the same commitment to your own clients as you do.