Without doubt, outsourcing offers many benefits to those who avail of it. However, as in any business, you should know and be able to translate all these benefits into solid figures. Knowing that you are gaining something out of it is not enough. If you do not track your actual progress, you will not be able to pinpoint the right time when you have to level up, maintain the status quo, or even ease back a bit in your business.
To help you do this, ask these questions to quantify the benefits you gain from outsourcing:
- Do you have enough manpower? Review the total tasks to be accomplished to operate your business efficiently. See if all these tasks are done as per schedule. Analyze the results if they meet the standard you set. Are these tasks done by your regular employees or by the outsourced ones? Applying the Perito principle of 80/20, see which group of workers contributes more effectively to your operation. With this static on hand, you can decide better if you either have to hire more or decrease the number of your worker and from which group.
- Do you save on manpower expenses? Review your payroll and see how much you spend for each of your in-house worker on a daily basis. Include the perks and mandatory compensation they are receiving. Compare this to the budget you set aside for outsourced hands. Then, compare and calculate how much work is done by each group, the in-house versus the outsourced ones. Again, use the 80/20 method of analysis. Note that spending less on any group does not necessarily mean saving. Consider, too, the importance of the tasks in your operation. Some of your regular workers may be paid more to do sensitive or very complex jobs that cannot be delegated to outsourced workers. However, consider also how much you pay your regular workers who do perfunctory or routine tasks that can done by outsourced hands at lesser cost. Include the quality of work in your analysis.
- Has production improved? Having a regularly up-dated production chart displayed for you and your staff to see is a good way to be on top of the situation always. See how much improvement is done before and since outsourcing is implemented. Note, however, that increased in production is not necessarily a positive thing. Having excess stocks because of too efficient production may mean actual loss if these goods are not moved out on time. Then you will have to spend more in warehousing, cutting prices to rid of the extra goods, and even destroying expired ones. In this case, outsourcing extra hands, although they cost less, may work against your profitability. Quantify your gains against your losses, if any.
- Do you offer better service? Make a study of the comments of your customers before and now that you have outsourced personnel. Are there more praises or complaints? See how many are added to your list of clients, why, and how much business have they added? By looking into the reasons, you can analyze if the improved sales can be actually attributed to the increase in personnel or is it the expected result due to added products, more aggressiveness in your sales campaign, etc. You can now decide for a better option to adopt.
- Has the time zone feature works for you? One of the unique advantages outsourcing offers is to enable your company to virtually operate 24/7. While you are asleep in your actual site, your outsourced worker completes the job in his/her overseas location. You can quantify this benefit by calculating the work hours added to your operation at lower cost because if the same task is done by someone in your same time zone, you have to pay the night-time rate for the same job at much higher cost.
- How much is the immediate availability of skill benefit you? Another big advantage of outsourcing is the prompt availability of skill. Calculate the money and time you spend to hire and train people to do complex task like, for example, IT. See how the expense is compared to the money you will spend to outsource the task to a skilled worker. Much more than the money saved is the importance of the time you spend to have the work done immediately. Therefore, add into your calculation how much you actually earn by having the job up and running than waiting for it to start operating later. Calculate the downtime lost in your business by the delay.
You can go on this way in quantifying every benefit outsourcing provides you and your company. Do not settle to just be aware that the process is working to your advantage. Like any astute businessman, knowing the hard facts in dollars, rather than depending on abstract benefits in your head, will motivate you more and assure you that you are on the right path to success with outsourcing.
To learn more about the actual benefits outsourcing provides, inquire from legitimate outsourcing companies like Mr. Outsource for assistance.