Outsourcing, ads and cons
What happens when you find your in-house employees are unqualified or unavailable at the moment to complete a momentary task is that you reach for outsourcing as an option, sometimes even the only option!
In this article we will discuss some conditions where outsourcing is the most logical business decision you can make to fulfill the requirement of your company or personal needs. In other words, outsourcing is the best option when it:
- Saves Money.
- Help make deadlines.
- Increase productivity.
This is the main focus of financial companies (or companies with financial goals on top) which constantly go through the choice between in-house and outsourcing tasks. But it is the quality of work that determines whether outsourcing is the best solution or not. So only companies which maintain the balance between having qualifies individuals to manage their software (or other) problems and still manage to save more money than they spent on in-house labor are considered to have outsourcing as the best option.
Yet, saving money as a concept is not well understood by many people who, when it comes to outsourcing, imagine that they’ll have third-world employees who are ready to do whatever job in whatever salary the company states, even if lower than their in-house colleagues. If this carries some truth, it’s not accurate when talking about contemporary outsourcing.
Because nowadays outsourcing isn’t just about having cheaper labor, it’s about having more qualified (and maybe more paid sometimes) people who can solve complex software problems from their houses and make the deadlines which are unreachable to some in-house employees. This may sound confusing and frustrating to those who think that they can never get less expensive labor than the in-house’s unless they compromise the quality or the deadlines (which makes the outsourcing option in vain).
This is when the necessity of labor costs examination arises. You should do some calculations to see how much an outsourcing employee can cost compared to an in-house one taking into consideration the following:
The outsourcing per hour rate: this could be more expensive that in-house.
Benefits obligations: like social security, Medicare and workers’ compensation which apply only to in-house and not outsourcing.
Physical burden: don’t forget that the outsourcing work is totally offsite, meaning that the consultant doesn’t need an office or a computer or whatever that can take a physical space in the company.
Those are the most important factors that you should put their ads and cons in mind while considering whether outsourcing is the best option for your case or not.
Helping make deadlines
Deadlines are the most crucial thing about any project most of the time, so it becomes really frustrating to companies when they have to cancel the idea of a great project just because their employees’ drawers are stuffed with queued tasks and no way you assign a new project with an aggressive deadline. This is when outsourcing is the savior of the project. When having a good team of consultants you don’t have to worry about having someone to get the software done on time, you just focus on the project idea. Thus outsourcing becomes the best option ever for you.
In general, schedules are heavy burdens in all companies. They either require jobs to be done in a very short period initially or become changed (to the worse usually) due to emerging problems. But as general as this is, clients are usually not that understanding. Only few Utopian clients can be ok with a consultant who’s 2 days late on delivering their projects.
Maybe that’s the most direct benefit of outsourcing that makes the idea considerable by many, that it gets more work done. But don’t rush! You have to make a very important calculation now. Get the calculator (or open it from Accessories if you are using windows!) and do the following:
- Determine the total amount of time your assigned (or any) in-house employees can do the task you have in mind (taking into consideration any possible delays).
- Now do the same for the outsourcing option.
- Compare between the 2 numbers, maybe find the ratio between them too.
Say that the in-house : outsourcing ratio is 3:1, this means that you in-house employee will take 3 times the time the consultant will take! No doubt outsourcing is your best option then. Notice that the consultant is, in addition, more efficient and willing to prove himself usually.
On discussing the time issue, a very important thing to consider about in-house employees having many tasks at one time is the natural delay. That is, when an employee is assigned multiple tasks he consumes more time during each task, even more than it would take him to complete the very task if it was the only assigned to him. That’s because such multi-tasking employees, who are not necessarily as efficient as they think, take some time after each project to evaluate what they have done and determine what to do next. Few seconds are taken to do this maybe, but seconds count and pile.
On the other hand, you usually assign one task to a consultant, so you get more focus on the project and less natural delay.