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November 1st: Torsten Jacobi, CEO of Creative Weblogging, joins host Anita Campbell. Sponsored by Six Disciplines. Show details.
Thursday, September 22, 2005
Outsourcing Companies Target Small Business
We all outsource. Or subcontract if you prefer.

Guy Clapperton at Business Insight is quite right when he points out that most small businesses have been outsourcing things like accounting for many a moon.

On a personal level we all tend to outsource our plumbing, electricity or joinery needs once the toilet, the exploding socket or the new fitted wardrobe prove a project too far.

This is what you'd probably refer to as the outsourcing of expertise.

It's primary function is to do any given task far better than you could yourself. It may very well save you money in the long run, but that isn't its focus.

And we're all very aware of the outsourcing of call centers to Mumbai. It's not so much that these people don't know what they're doing rather than the corporations running them only glancing a cursory nod towards customer satisfaction for the sake of pinching a few pennies.

The Telegraph has an article discussing how small businesses are now the targets of firms which provide various backroom services such as payroll, human resources and communications.

However, the Federation of Small Businesses urges us to be careful:

"People should make sure they are getting the right service for the size of company they are. They should not have to shell out for blanket coverage. It's about striking a balance," said a [Federation of Small Businesses] spokesman.

I once worked at a place with only four employees that outsourced its ablution services. In other words, we had somebody come and collect the used hand towels and replace them with fresh ones. It would've been infinitely cheaper to buy new every week.

The company I'm currently associated with is often on the receiving end of much outsourcing. Yes, it's cheaper for the firms wishing to outsource as they don't have a dedicated workforce to pay on an ongoing basis. But, this is still an example of outsourcing of expertise. Subcontracting is also as old as the hills in the world of manufacturing.

It doesn't matter whether you outsource to your next building, next town, city, country or half way across the world - we all outsource if we don't have the in-house capabilty to deal with certain aspects of our business - whether it be a temporary peak in work we can't handle or certain things we don't have the expertise or inclination to do ourselves.

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