Chances are good that you have at least a few tasks associated with your business that you’d rather not handle. But according to Jim Lanzalotto, principal at Scanlon Louis, “Don’t outsource something just because you don’t want to do it.” Why is this? Well, one of the biggest mistakes that entrepreneurs considering outsourcing make is assigning tasks that are important to their company image. If you do this, customers may feel that you no longer provide that special service that elevates your business above the competition. Perhaps this is even the reason why The OutSource Blog reported in 2010 that the user satisfaction rates dropped an average of 13% when companies outsourced work overseas.
But identifying tasks that can be outsourced (you might already outsource legal tasks, payroll, and background checks for new employees), is a crucial component of rapid business expansion. More and more, companies are outsourcing work overseas, especially in India. AMR Research Inc. published a study in 2009, which revealed that about 80% of companies were either outsourcing already or were planning to increase their information technology outsourcing in 2010. And IT tasks are the perfect opportunity for high quality outsourcing, as long as those tasks are not connected to your company’s main image or product.
How to Identify Outsourcing Opportunities
There is a common misconception that outsourcing has to mean sending work overseas, but this really isn’t the case anymore. Today, outsourcing is simply regarded as hiring a freelancer to perform a task that you can’t or don’t want to do in-house by hiring an employee. When looking for tasks that can be outsourced, consider all of the tasks involved in your business and write down the ones that aren’t a core part of your business offering. For example, if you operate a business that provides certain office materials, like business cards, and you want to improve your website, you have a whole list of tasks that can potentially be outsourced, including:
- Domain name research
- Search engine optimization
- Web design
- Content writing
- Keyword research
- Forum moderation
- Inventory management
- Financial management
- Tax preparation
- Video production
Imagine all of the costs that you would incur by hiring an employee to handle each of those tasks (all of which would likely be ongoing as your online business grows). Freelancers bid on specific work that you need done, which means that you can save money on services that your core competency workers don’t need to worry about. On the other hand, if you run an Internet content writing company, outsourcing content writing probably wouldn’t make sense with your business model.
Where to Outsource
There are three basic types of outsourcing that you can use to accomplish your business goals: outsourcing through portals, crowdsourcing, and economy outsourcing.
Outsourcing Portals – Elance.com
Outsourcing portals connect business owners with a community of freelancers that compete to bid the lowest price on the work that you need done. Each bidder has a profile that lists their past work, experience, and any feedback that previous clients have given him/her. Portals help prevent fraud by acting as a middleman between the client and the freelancer. However, portals are sometimes saturated with under-qualified workers. Outsourcing portals can be used for a variety of tasks.
Crowdsourcing – SquadHelp.com
Crowdsourcing is a type of outsourcing where freelancers or companies all perform the task you request, and you choose the work that you like best, only paying the winner. Obviously, crowdsourcing is not ideal for some tasks like tax preparation or administrative assistance. However, it’s perfect if you need to design a website or logo, come up with a name for a product or service, or get some content written for a website. In general, crowdsourcing is perfect for simple tasks but nearly impossible for more complicated ones.
Economy Outsourcing – Fiverr.com
Economy outsourcing sites use a simple system to accomplish small tasks – freelancers tell you what they’ll do for a certain amount of money. For example, Fiverr.com hosts freelancers that will perform tasks for $5.00, like write a 10-15 page user guide, read a script, design logos and banners, etc. While these sites attract a great deal of freelancers offering to provide more humorous tasks like speed drawing or singing Happy Birthday to you, they also feature real professionals willing to provide a valuable service at a low price.
When you decide to outsource, you will deal with some of the aches and pains associated with doing so, probably on a regular basis. For example, it can be difficult to accurately describe tasks over the Internet or telephone, and the freelance industry is loaded with workers that might not be able to reach your standards. However, with a little patience, you will begin to find freelancers that perform good work at fair rates. You’ll also be able to draw from a talent pool from all over the world, not just the region where your company is located. Eventually, you should have a list of freelancers with which you enjoy working, and who enjoy working with you – and that’s one of the greatest assets a business owner can have.