Spend More To Reduce Costs.

by | Nov 18, 2019 | Growth Management

Spend More To Reduce Costs.

According to a Deloitte’s 2016 Global Outsourcing Survey, what was the most common reason that companies outsourced elements of their business? Bear in mind that more than 85% of respondents were from organisations with over $1 billion in annual revenues.

Five reason businesses outsource tasks

  1. Gain access to expert talent and knowledge
  2. Improve service
  3. Reduce or control costs
  4. Focus on core functions
  5. Accelerate organisational transformation

When it comes to outsourcing and growing your business you need to hold yourself accountable. It can be difficult, and without the right plan in place hard to know when that might be. Whatever your reasons for outsourcing I realise there can be frustrations as well as advantages but with careful control and accountability it’s a great opportunity to grow your business. Just make sure you never let your frustrations get the better of you.

I don’t have the money to outsource

This is arguably, what I believe, the number one reason people don’t outsource work and holding back their ability to grow. Typically, businesses look at their income and find a need for that money, but by avoiding outsourcing they are spending time that could be gaining sales of a greater value. For example, if you typically make one new sale per week of around £1000, and outsource for £300 you’re technically making £700. But if it takes you a week to do the same amount of work as that person charging £300 you’re actually losing £1000. When converting a sale calculate the cost of outsourcing integral parts of that job that will save you time. That way you’ll never miss the money you never calculated as your own.

I don’t trust others to do the job

As a business owner your main ambition should be to grow your business which will mean sooner or later you’ll need to either outsource or employ. The ability to outsource is bigger than it ever been before with the global market size of outsourced services in 2018 at $85.6 billion.

Building trust comes by making sure each person in your team is accountable for their role, for their contribution to the larger project. You have to build that process and set targets that allows each individual to add their own flair and skill without missing the targets you set. With outsourcing if someone doesn’t suit your way of working or aren’t able to complete the job you can quickly and professionally move on and find the team that’s right for you.

‘A team aligned behind a vision will move mountains’ – Kevin Rose

When is it the right time to build a team?

If you don’t have enough time within your working day to manage the work in your business and spend time on your business then it’s time to build a team by either employing or outsourcing. But don’t just jump straight in and instead plan the process, structure your approach to outsourcing. Are you looking for a specialist per project and forever changing who you use, or do you build trust with a generalist who works across each and every project, someone who becomes an employee?

Once you have that person, be accountable to yourself when focusing on growth. Avoid the habits of micromanaging and allow yourself to spend time on the business trusting those you have employed.

Accountability is the glue that bonds commitment to results.’ – Will Craig

Finally, to answer the above question, 59% of companies asked mentioned they used outsourcing to reduce or control costs, closely followed by 57% of companies doing it to focus on core functions.

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