HR & Management
Considerations when outsourcing services
6 min read
24 February 2017
The argument that “outsourcing services can save costs” is well-known, but is it really true? There can still be a number of hidden costs and you might introduce new challenges for your organisation.
Still, there are plenty of good reasons for outsourcing services, but it may not always be the best option for your organisation. Services that are essential to your core business are best kept in-house.
For example, it’s appropriate for nursing home residents to know that the kitchen staff know who would like a piece of fish versus chicken on Fridays, and that the cooks know which residents want less salt on their food.
Whether financial savings is an argument for outsourcing services or not, you should always ask yourself to what extent the experience of your own product will be harmed by it.
After all, your own employees are more involved in the organisation and often have a heart, perhaps even a passion, for your business. However, there are enough arguments in favour of certain outsourcing services within your organisation that sometimes it’s the best option.
It doesn’t matter who does it
Services or products that can be standardised, and for which you can make clear agreements on the supplied quality, can easily be outsourced. These are often services that do not directly affect your core business.
Think of your building’s security or the monthly visit from the window cleaner. These activities need to be performed correctly, but not necessarily by people who are closely involved in your company.
In this situation it is probably best when the person is not too involved in the organisation so they can fully focus on their tasks. Receptionists often feel involved in the organisation and, therefore, perform more tasks.
These tasks can be logging disruptions, or placing an order for one of their colleagues. This can be very helpful, but not always desirable. A supplier is probably more efficient when performing these tasks.
It is important to keep the organisation’s goals in mind and what contributes to achieving them. When your organisation wants to distinguish itself with excellent services and strives for good customer relations, your service desks plays an important role. It is not logical to be outsourcing services in this case.
Hiring external expertise
When you need special – often technical – knowledge for a task, it might be advisable to hire external experts. They are up to date on the latest developments in their area of expertise and often make smarter decisions because of this.
Sometimes small changes can have an unexpectedly large impact on your organisation. By making a small change to the settings of your climate control system you can drastically reduce your energy use, for example.
You also need extended expertise and up-to-date knowledge for managing something like Oracle databases. A specialised third party can make sure that the impact of disruptions and changes is limited.
Sometimes your organisation only needs specialist knowledge for a short period of time, for an Exchange migration, for example. Here, it is not worth hiring someone to do the task. An in-house Exchange specialist should always be up to date on all developments in his area of expertise for his or her work to remain intuitive.
This leaves this employee with little time for other developments. If you only hire an Exchange specialist when you need the knowledge, you will hire someone who can focus full-time on keeping his or her Exchange knowledge up-to-date.
Effectively scheduling your staff
It is smart to work with suppliers when your organisation experiences large fluctuations in required capacity. A high school’s IT department is often busy in September: everyone starts school again, many people lose their password and it can take a while before everything is up and running.
Peak seasons in the hotel and a continuously changing demand for leased cars are good examples of fluctuating needs. An external party can supply you with these additional resources when needed.
When your HR department cannot match the occupancy needed in the organisation, it is a good – hopefully – temporary solution to choose for additional manpower. It’s important to understand that these temporary workers cannot immediately carry out your organisation’s culture and vision. It’s a feeling that needs to grow.
Flexibility in staff can ensure that there are fewer problems when employees are ill or on holiday. Your supplier will make sure that there are enough people present, making your organisation less dependent on available internal staff.
Solving supplier needs
Cost saving is only half the issue. You also need to be outsourcing services to someone who knows what they are doing – and someone with whom you have a great relationship
You will want things to run as smoothly as possible. But no relationship works well without communication, which is important to keep up, no matter your strategies for outsourcing services.
Nancy Van Elsacker Louisnord is the president of TOPdesk US