| Business as usual? That cliché is no longer | | | | with limited internal resources. |
| an option in today's economic climate. Companies | | | | Steps to take! |
| of all sizes (private and public) have had to rethink | | | | The proactive CEO will recognize this shift in the |
| the way that they do business in order to | | | | way business is transacted and will begin to build |
| compete profitably or at least be able to survive. | | | | his/her own "power team" of outsourced |
| The economic recession of 2001 forced many | | | | professionals. This selection process is as |
| CEO's to re-examine their markets and what it | | | | important as if they were hiring full-time |
| takes to retain a competitive edge. Through the | | | | employees. It needs to address the technical skills, |
| globalization of the marketplace, countries like | | | | related costs and fees of such services versus a |
| India and China became a viable resource, and | | | | full-time employee, ensure a level of trust and |
| companies could not remain profitable when | | | | confidence and be aligned with corporate strategic |
| focused strictly on employees and suppliers in the | | | | goals and initiatives, etc. |
| domestic U.S. Subsequently, the current recession | | | | The initiatives that need to be implemented are: |
| struck and panic spread worldwide. Every | | | | * Identify which facets of your business will |
| company struggled to find ways to reduce costs | | | | require strategic assistance from outsourcing. |
| and continue to maintain market share. Those | | | | * For each of these areas, develop a detailed |
| companies demanded reduced pricing from their | | | | checklist of your requirements, which should |
| suppliers which brought deflated gross margins to | | | | include but are not limited to technical expertise, |
| those vendors and added more pressure to | | | | industry background, term and scope of services |
| operating results. The domino effect was a swift | | | | and budgeted cost of services versus hiring a |
| reduction in employees which sent the | | | | full-time employee. |
| unemployment rates skyrocketing. | | | | * Begin to interview several individuals/firms that |
| So what's the future? | | | | you feel will be a good compliment to your |
| The future will require many businesses to utilize | | | | business needs. Be sure to not only address the |
| outside consultants in a more proactive way. It will | | | | items from your checklist, but to evaluate your |
| be a number of months (if not years) before | | | | ability to comfortably interact with this person |
| consumer confidence responds and CEO's will be | | | | firm and your initial level of trust and comfort. |
| motivated to add employees (if ever). They will | | | | * Once you've made your selection(s), work with |
| need the services of individuals and firms to | | | | the professional to define and refine your business |
| perform necessary functions on an outsourced | | | | strategies along with specific timelines for |
| basis, also known as business process outsourcing. | | | | completion. In very few instances, would you |
| Outsourcing will embrace everything from sales | | | | need to sign any long-term contract with the |
| professionals (either directly selling or managing | | | | consultant. You should always have the flexibility |
| the sales force), financial professionals assisting | | | | to utilize the consultant to support the ebbs and |
| the Company to strategically navigate through | | | | flows of your business. That is a significant benefit |
| difficult times, HR, IT services, Marketing, | | | | in using outsourcing versus full-time employees. |
| Operations and more. In fact, it has been widely | | | | The ability to control your manpower utilization |
| published that many of the unemployed | | | | and thus your costs of operations. |
| executives today will be unable to obtain suitable | | | | * Develop a formalized work plan to monitor |
| employment and will begin their own businesses, | | | | progress and performance. As with any full-time |
| most likely consulting in their field of expertise. | | | | employee, you must be able to evaluate, manage |
| The day of having a staff of full-time employees | | | | and measure the value of the consultant to your |
| responsible for each of the company's functions is | | | | business. |
| in the past. | | | | Prior to the recent string of economic recessions, |
| Some of the benefits of outsourcing are: | | | | business owners and CEO's only had to |
| * Reduction in payroll costs and related employee | | | | understand their business and industry in order to |
| benefits and payroll taxes. | | | | be successful. In today's new world, that alone is |
| * Reduction in R&D costs. | | | | not enough. They will need the ability to tap into |
| * Increased efficiency through specialized | | | | the expertise of other professionals, in a way |
| resources that will meet the immediate needs of | | | | that rewards them with cost effective solutions |
| the business. | | | | and the ability to be competitive in an aggressive |
| * Ability to implement projects quickly. | | | | marketplace. Properly utilizing the skill sets and |
| * Reduced capital costs (cash investments) by | | | | specialized resources of consultants to match the |
| renting/leasing equipment of outsourced firms. | | | | business strategies is the new focus. |
| * Allows strategic growth of the business even | | | | |