There are times when outsourcing is the only option for reasons such as no in-house employees being qualified or available to complete a particular task.
However, there are also times when outsourcing is not the only option but also the best option. In these situations, outsourcing becomes a wise business decision rather than a requirement or a matter of personal preference. This chapter will discuss three concerns where outsourcing is the best option.
These options include:
- When outsourcing saves money.
- When outsourcing helps make deadlines.
- When outsourcing increases productivity.
When Outsourcing Saves Money
Outsourcing becomes the best solution when it saves the company money without compromising the quality of the work. Companies whose goals are predominately financial focus on the bottom line in determining whether or not to outsource projects or tasks.
It is certainly not the best solution when cost savings result in shoddy work. However, companies able to outsource projects to highly qualified and capable individuals while still saving money enjoy the benefit of knowing they have selected the best solution for their software-related problems.
Whether or not outsourcing saves money is a concept that many need help understanding. When most people think of outsourcing, they picture citizens of third-world countries working for substandard wages, but this is not an accurate representation of outsourcing.
Nowadays, outsourcing often involves hiring high-priced, domestic consultants to tackle complex software problems under aggressive deadlines.
This explanation makes the issue even more confusing for some who think it is impossible for it to be less expensive to hire a high-priced consultant than to complete the task in-house.
Examining labor costs is often necessary to see how outsourcing can reduce costs. Outsourcing may carry a higher per-hour rate, but it is important to note that the company is usually not required to pay benefits such as social security, Medicare, and workers’ compensation to the consultant.
Additionally, the consultant may work offsite, meaning he is not putting a drain on company resources. Examining these factors is necessary to determine whether or not outsourcing is the best option.
When Outsourcing Helps Make Deadlines
Aggressive deadlines often make outsourcing the best available option. Most companies do not want to have to turn down work because they need more staff members available to complete a particular project.
Outsourcing software jobs makes it easier for a company to compete for more jobs than its staff can handle. This is because the managements know they have a network of consultants to rely on during tight schedules. In these cases, outsourcing becomes the best option.
Whether schedules are set initially to be rather aggressive or become accelerated due to problems earlier in the project, they can become a hassle for many companies. Regardless of the cause of the scheduling concerns, clients may need help understanding if the consultant cannot meet the required deadlines.
When Outsourcing Increases Productivity
Outsourcing also becomes the best solution to a problem when it results in increased productivity. Consider the tasks you intend to outsource and determine the time it would take for these tasks to be completed in-house.
Now consider how much time it would take to complete these tasks through outsourcing. If the answer is that outsourcing would be quicker, it is logical to outsource these tasks. This is because the consultant can be more efficient with the charges.
When considering productivity, it is also important to note that employees handling multiple tasks often take longer to complete each task than they would complete if they were their only responsibility.
This is because employees who multitask are less efficient than they believe. The main problem with multitasking is when switching from one activity. There is a slight delay each time the employee changes tasks because he often has to review his recent progress and remind himself what he intends to do next.
Conversely, outsourcing singular tasks allows the individual to focus 100% on each job.
When Outsourcing Is The Only Option
Deciding whether or not to outsource particular tasks is one of the many important decisions that both large and small companies alike often make. This can be a difficult decision at times. Still, the decision-making process is often greatly simplified, and it becomes clear that outsourcing is the only viable option.
This may occur when the in-house staff needs to be qualified for these tasks, when the in-house team is already overburdened, and when individuals with particular qualifications must complete specific client requirements specifying certain charges.
This part of the chapter will address each of these situations and discuss why outsourcing becomes the only solution in each case.
The Qualification Of In-House Staff
Sometimes outsourcing becomes the only option available because no in-house staff members are qualified to perform a particular task. This often occurs when a job requires a highly specialized degree or area of expertise.
Employees who could be more productive are expensive to the company. This is especially problematic when the task in question is infrequent. When this is the case, it does not make sense for a company to hire an employee with these capabilities when they are rarely utilized.
However, if this task becomes required regularly, the question of whether or not to outsource the task becomes more complicated. As this part of this chapter focuses on situations where outsourcing is the only option, we will not delve further into the factors that complicate this decision, such as labor costs and increased human resources.
Smaller companies often need more qualified staff members for particular tasks than larger ones. Larger companies have a larger pool of employees to pull from. It is, therefore, much more likely for smaller firms to have gaps in their expertise than for larger companies to have these gaps.
The Availability Of In-House Staff
A company may need tasks to be completed relatively quickly. Although it may be a task for which several in-house employees are qualified, current workloads may make it impossible for these employees to take on these tasks. Sometimes outsourcing becomes the only option based on staff availability.
Company employees often multitask and may be working towards several serious deadlines at any particular time. Management is tasked with the responsibility of doling out work to lower-level employees. When they feel their in-house staff needs to be able to take on more work, they often turn to outsourcing as a solution. When this occurs, outsourcing again becomes the only option.
Workloads often become a factor in outsourcing when projects are particularly time-sensitive in nature. Employees and employers often have to prioritize the multiple tasks they are managing. Still, there are times when several projects or tasks become urgent simultaneously. When this happens, it may become challenging to complete all of these tasks with only the assistance of the in-house staff.
Client Requirements
Sometimes outsourcing becomes the only option as a result of client requirements. Depending on the complexity of a task, a client may require the consultant firm tasked with completing a mission to have the job performed by an individual with specific qualifications.
These qualifications may include specific training in certain types of software, exact education requirements, or previous work experiences. Companies that do not have in-house employees who meet these specific requirements have no choice but to outsource the task to a qualified individual.
When this is an isolated incident, companies often outsource the task. They need to attempt to hire a full-time employee with these qualifications. This is a wise decision, especially when the client requirements require an expert in a particular niche of the software industry. Employing an employee of this caliber would likely be rather expensive, especially if he would rarely be called upon to utilize his advanced skills.