Outsourcing provides some businesses with advantages such as lower labour rates, access to industry specialists, and improved versatility.
Despite the apparent benefits of outsourcing, there are several instances in which it is not a good idea. While there are some situations in which outsourcing is a viable business choice, there are others in which outsourcing is not the best option.
In these cases, it is preferable to retain the job in-house rather than trying to work out an outsourcing arrangement.
TIP #1. When Outsourcing is Too Costly
Outsourcing has a number of benefits, one of which is cost savings. Since costs like social security, health insurance, and workers’ compensation are often eliminated, outsourcing often results in lower labour costs. Outsourcing projects to industry experts can also result in cost savings due to improved performance.
Despite the numerous cost-cutting opportunities, there are certain instances where outsourcing can be the more costly option, resulting in a financial loss rather than a benefit.
This may involve a scenario in which the expense of hiring a highly specialised specialist exceeds the project’s budget. Individuals with highly advanced degrees or fields of specialisation often pay ridiculous fees. Another scenario is one in which locating a suitable person to complete specific tasks will be prohibitively costly.
TIP #2. When Outsourcing Causes You to Lose Control
So when tasks or projects are outsourced, the organisation in charge of the job prefers to maintain control over the project and monitor task progress. Since they are ultimately responsible for the project’s successful completion, it is important for the organisation to continue to oversee the project even though it has been outsourced.
Outsourcing is a poor idea if a person or organisation tries to refuse the company access to project files or documents. The organisation with a vested interest in the project’s outcome should never be excluded from project decision-making.
Prior to outsourcing a task or project, it is important to define project management requirements. Daily meetings to provide feedback on the project’s progress can also be beneficial, depending on the duration and scope of the project.
During this time, the contractor should provide the employer with all appropriate documents to review the project’s progress to insure that it is still on track to be completed by the deadline.
TIP #3. When Outsourcing is Not Permitted
Outsourcing isn’t always a smart idea just because contractual restrictions prevent it. Some project contracts can include clauses prohibiting the job from being outsourced to another person or organisation. Clients are well within their rights to include such a clause in a contract agreement.
If they employ a company to complete a project or task, they require all work related to that project or task to be performed by employees of that company unless the contract specifies otherwise.
In this case, breaking the contract documents is not a smart idea. The client can impose a penalty on the business. Penalties could include denying payment or refusing to award the company future contracts or activities.
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We have highly skilled and specialised staff in many diverse fields who are perfect for your company. Nova provides powerful, flexible outsourcing solutions that will help your company be more profitable. Here are some of the areas we can help with: · Personal Assistant and Admin Support · Call Centre Services · Debt Collection · Accounting and Finance · Legal Support · Technical Support · Online Marketing · Real Estate Support
Allow yourself and your staff to concentrate on the high-value, skill required tasks that make a real difference to your bottom line.
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