Intelligence Pathways - Business Intelligence and Competitive Insights

By: Monica Angelova 11-Sep-2012

Whenever we give work to consultants outside of our organization or we have to use subcontractors we basically outsource the job. We outsource for various reasons such as because we lack competencies in that certain area or we are trying to save up money, and oftentimes we do not have the human resources needed. It is important to carefully consider the reasons why we should outsource, the pros and cons, in order to be able to determine if outsourcing is the right next step for your company.

Why consider outsourcing in the first place?

One of the most often quoted reasons is for the sake of cutting budgets. There are places outside of the Western countries and business environment that might do the work for a percent of the cost. However, when choosing a long distance destination to complement your office needs you must make sure that both parties involved have clear expectations and also have the know-how to perform professionally and deliver what is considered a professional product in your part of the world. For example, you need to pertain an employee who will be directly responsible to work with the subcontractor and get to know their style of work and working habits. Be careful and do not neglect cultural differences, as some cultures always take on more work than what they can perform and tend to promise more than what they can deliver. If possible chose a cultural setting that is as close as possible to yours.

Need to hire employees but cannot afford the hidden costs of employment benefits and the huge salaries in your area?

Another instance when outsourcing might be suitable for you is if you need to hire more employees but you cannot afford to hire them as that involves many other hidden costs. Then instead of having to employ people to work for your company, you can simply work with an outsource provider that guarantees you specific number of headcounts. There are companies that provide dedicated employees to your projects only and that would be directly committed to working with you only. Then again, you will have to pay for those experts, but if you select a more cost appropriate destination it would be times cheaper and would not involve the employment cost and the worry about their 401Ks and equivalent plans in their countries. You can even fly them for trainings and educate them. There are organizations nowadays that offer similar services. Note to managers: Research your destination and make sure that work force there has been educated in modern Western institutions. Government and public statistics should be available for most countries. For example, according to the statistics in Bulgaria show that since 2006 there is a growing trend of Bulgarians who got educated abroad and then came back to work in their home country.

Moreover, if you are a one man team supporting an entire organization and would like to finally have the more labor intensive projects up and running you can definitely use outsourcing help.

Last but not least – geographic destination “outsource”?

Many businesses outsource to China and India and that works well for their organization. If you prefer to outsource somewhere else for example within the U. S. or in other Western places like Europe it can be even more expensive for your organization to do that and you might be better off keeping it in-house. However, places in Eastern Europe, such as Bulgaria can be a great solution. According to, “Bulgaria is one of the hottest investment locations in Europe today.”

Once you have decided that outsourcing is the best for your company you need to make sure that you execute it accurately.

What else you should keep in mind?

Make sure that the organization you are about to hire:

1. has professional consulting experience as well as the experienced experts who have worked in the industry.
2. are close to your understanding of how business should be done
3. realize whether deadlines are feasible and do not promise more than what they can deliver
4. are able to prioritize and plan their resources
5. always keeps you informed on how the work process is going and if any unexpected circumstances have occurred.

As a contractor always provide feedback to your subcontractor in order to keep them informed of your expectations and their performance!

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