Which outsourcing model is meant for your SMB?
April 18, 2019
Outsourcing is very common, but so is the desire to be self-sufficient (or at least autonomous). However, businesses can only handle so much, especially startups with not a lot of employees. What it comes down to is getting the job done efficiently and professionally. For many businesses, outsourcing is the best option for at least one of their departments.
If your business chooses to outsource, you should become familiar with the different models. You have options in terms of partners, whether you’re looking for assistance on individual tasks, lasting relationships, or representation by a professional service. Do you expect to have full, little, or no control?
Regardless of the model, outsourcing allows you to find the right fit for the job. In terms of scalability, outsourcing is your best friend.
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Finding the time and patience to train your already busy team on something unfamiliar might not be ideal. And beyond that, there’s a lot of risk involved when trying to navigate through uncharted waters, at least without the help of a guide. That’s a good reason to explore the various outsourcing models or strategies.
This outsourcing model merges your existing resources and team and the specific professional skills required for a task.
Staff augmentation has increased in popularity for two reasons: IT and a lack of talent. The developments in IT resources across recent years have made collaboration an unavoidable convenience. With the ongoing war for talent due to the limited number of professionals in some fields makes finding a team of in-house professionals extremely timely, if not impossible. In some cases, outsourcing might be the only option, let alone a “better option.”
Staff augmentation involves outsourcing talent in order to avoid paying employees for full-time work. It’s gaining popularity based on the control managers can maintain over their team and the ability it provides for companies to scale.
The use of this model allows you to combine your already established team with a few professionals in the field. This way, you can rest assured that you’re employing only qualified and appropriate experts for the task. And who knows, your team might be able to learn something new for the future.
Our gig-economy is boosting this outsourcing model, and for good reason. Employers no longer have to attempt to piece two separate companies together. Implementing a few skilled professionals into your team allows for a breezy transition.
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Not looking to collaborate so much? Want an outsourcing model that can be managed by the external team and stand on its own? Then let’s move on from staff augmentation and onto project outsourcing. Or, try a combination of both outsourcing models.
With project outsourcing, a task or a whole project will be fully managed by an external team or company. This means that, since your tasks are in the hands of professionals, the project is more so out of your control.
For many, this may be a relief. One less thing to worry about. But the division in communication and planning might make some managers and business owners weary. If you’re concerned about losing your brand or consistent style because of individual project outsourcing, find some solutions here.
Be sure to communicate your goals and requirements with your new partner. Any project outsourcing business will be eager to keep its B2B clients satisfied and well represented. Of course, it’s still your responsibility to set the project manager up for success.
Since project outsourcing is based on individual tasks, this model suggests a more temporary partnership. This point has pros and cons. The lack of commitment can save businesses on costs and from being stuck with a poorly performing partner. Where some may be attracted by the lack of commitment, others may prefer stronger, trusting connections, business relationships, and customer loyalty.
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Like staff augmented outsourcing, project outsourcing allows you to scale to your business needs. You will find your business is less limited to its own ability and timeline, and your in-house team will be able to focus on tasks that they are better equipped for.
Services generally rely on relationships, regular use, and reputation. Therefore, managed services tend to run long-term.
With the managed services model, the service is run by the provider, but the project is still managed by the client. In this way, you still have plenty of oversight into the service your company is outsourcing.
Out-tasking is a model that is suggested more so for better structure, better accountability, and less so in terms of cost savings.
Out-tasking is a more specific model of outsourcing, which kind of acts as a hybrid between the staff augmented and project outsourcing models. However, out-tasking involves specialized experts, acting as an extension to your IT team. An out-tasking partner will work with your established programs and resources and offer insight into an assigned area or task.
The duration for these partnerships is usually at least a year. These relationships offer great insight into certain resources so much that they work themselves out of work once in-house teams become familiar with the methods.
Out-tasking involves much more communication between the client and the provider. If you invest in out-tasking, you will set milestones and review the progress of work done. In this way, you are hiring a subcontractor and managing their efforts.
Wish you could do a test run before committing to an outsourcing model? That’s exactly how the build-operate-transfer model works.
Using B-O-T, you outsource the development of your team and reclaim it once it’s up-and-running. This may be extensive in terms of preparation and communication. And if you’re already in a slow jog, it might be hard to adjust your pace. In this case, try a model that compliments your brand and team, rather than develop new ones.
B-O-T builds your team and processes from the ground up. That’s a lot of control and may reflect the providers’ brand, rather than your own. That’s not necessarily a bad thing. Having a professional style, effective resources, and inheriting them as your own would be a load off. Having a system in place and an expert team that you didn’t have to craft is worth its weight in gold.
Of course, based on your business needs, the appropriate business model will be more or less obvious. The first step is understanding your business’ goals and the abilities of your in-house team.