We are in an era where startups and small-medium enterprises are emerging. We have already seen a lot of people with a never die attitude start and flourish companies from a team of 2 to 100s of people and others with many successful products. The journey of SME and startups can be made easy if outsourcing of certain functions is outsourced smartly. Ask any startup or SME founder, and they must have experienced that. It is equally challenging to run a startup, if not more, as it is exciting to start one. Because apart from getting a project or investment, other necessary tasks are naturally included while running a business.
The best part is that the new generation enterprises are more energetic and dynamic, solving more unique problems and helping the community function even more smoothly.
For more information also read – https://smeventure.com/the-emergence-of-platform-led-enterprises-changing-the-way-of-business/
Consider an IT company giving services to their clients or developing a product for such company functions such as:
- Payroll
- Accounting
- Marketing
- Sales
- Support Staff
Consumes time and money that can be saved by outsourcing. Because when outsourced, the startup and SME will not have to invest in hiring, equipment, training, and additional office space. All of these investments will be taken care of by the outsourcing company.
If you are a startup or small-medium side enterprise, the focus should be on the core skills you offer your customers as a service or to build a product. The focus should not deviate from the core strength or the core business problem you are trying to solve.
What to consider while outsourcing:
Outsourcing is an optimal strategy for startups. But the choice of outsourcing should be evaluated based on the following points:
- What and how much to outsource – The size and state of the business should be checked before outsourcing. You would not want to subscribe for a coworking space when you are already about 40+ people team with a promising business and plan to grow. But outsourcing the
- Can you cut the cost and save time- Hiring, training, acquiring hardware/equipment, software, and sitting place consume cost. Investing in these things for a function that is not your core area should be avoided. For example, there are an enterprise providing software services. Making an investment into finance and accounting or Marketing to handle in-house for a startup will not be a good idea. Instead, these can be outsourced to an agency with experience in these areas. It will save cost and time both with even greater output as the outsourcing agency already have experience.
When to stop outsourcing:
Even if an enterprise outsources some functions, it is not necessarily mean it should be outsourced for the rest of its life. Consider a startup outsourced marketing work to an external agency a year ago when the team size was small, let’s say, 20 people but now the team has grown to 50 people. Now the decision of outsourcing the marketing work can be relooked. It is not hard and fast to stop outsourcing at this point but a stage where the decision can be thought upon.
Stopping outsourcing must be planned. The ownership transfer from an external agency to an in-house team should be well documented and carried out carefully to avoid confusion. There must be an in-house owner who will own this function and a team who will support the owner in operations. The external and in-house team should be then aligned as per the plan. Also, there must be some overlap duration after the ownership transfer.
Do watch – https://www.youtube.com/watch?v=PuzisdPv1Xo&t=8s
What not to outsource:
It is also important to keep a check on what should not be outsourced. It is obvious that the work related to core skills should not be outsourced.
Although there might be situations where a startup or small-medium enterprise has to outsource the work related to their core skills. Consider a situation where a client wants quick delivery of a specific task or feature but the existing team is fully packed and hiring a new person will take time. In such case, it’s better to outsource this specific task instead of saying no to the client. The key here is to outsource the individual task but not the complete function.
At the same time, it’s an opportunity for the company to evaluate if there is a possibility of more work from the client. If yes, then hiring and onboarding of new employees can be done proactively because the core idea of the startup is to grow in their area.
To summarize, it is essential and meaningful for startups and small-medium enterprises to outsource but sensibly. Take a wise decision on what, to whom and when to outsource. And when to stop the outsourcing.
Author: Abhishek Aggarwal, Co-Founder and Delivery Head at SpeckyFox Technologies India Pvt Ltd