Give Your Business Time to Think – Outsourcing in a Modern World

A common phrase uttered by the older generation is ‘You young people have it lucky, things were a lot harder in my day!’ and to an extent this is somewhat true. We no longer walk 27 miles to school and back in the wind, hail and rain wearing nothing but a pair of shoes with cardboard soles held together with a piece of string, we’re much luckier – we have all sorts of gadgets and gizmos at our disposal to make our lives so much easier. However it seems that the very technology that was invented to make things easier for the Generation Xs and Ys is almost causing us to have less and less time to spend with our family, and indeed ourselves. Sure we have microwave ovens that can cook a meal in two minutes instead of twenty, but in todays society it still seems that we get home from work later, we do chores around the house later, and end up finally going to sleep around midnight, only to wake up in 6 hours time tired and weary and ready to do it all over again.

Take for example the wonder that is the cellphone (or the PDA). ‘You can communicate with anyone, anytime!’ the brochures stated ‘Wonder at the amazing mobile technology!’ Yes times have changed since the 60’s – not only does Dad wear a t-shirt and jeans to the office, but he also carries a PDA that beeps work at him 18 hours a day.

What a weary race advancements in technology seem to have made us. But it doesn’t have to be that way if we begin to embrace technology and utilize it in a way that WE define, not that is defined for us.

You see ‘in the old days’ it was easier for people to switch off between work and home life. Growing up in the 70’s it seemed that everyone was home for dinner, the customers never rang outside of work hours and evenings were spent either watching tv or doing a hobby of some sort. Now the customers ring or email all hours and it seems that all you do is work – whether it be in the office, on the road, or catching up with the chores at home.

Similarly, any business will know that it is harder to get everything done these days. Wage and general running costs mean that companies don’t have the overabundance of staff they may have had twenty years ago, which means that the day is spent fighting fires, and not spent guiding and promoting business growth. How many times have you heard ‘I’ve got quite a few big plans for the company, if only I could find the time to implement them!’

So where to start? One way to do this is look at what we fill in our days with, and see what can be outsourced to someone else. Outsourcing simply put is employing someone to add value to your business or life without having them as a permanent employee. In fact many small businesses have outsourced for years – getting accountants to do their tax returns, and print bureaus to design their brochures (to name but two examples out of the many). So, if it’s been done ‘manually’ for years, why not embrace technology and try the internet way of doing it? The internet-based outsourcing business is one that has grown considerably over the past few years and has slowly been embraced by business owners as a way to cost effectively dole out some of their day to day business activities thus leaving them time to focus on the core aspects of their business that they want to grow.

Some businesses approach internet-based outsourcing warily. They believe that outsourcing work to overseas markets for a quarter of the price it takes a local to do the task is anti-local, anti-national, and that it is taking jobs away from ones own countrymen and women. What a lot of people fail to understand is that with outsourcing you don’t HAVE to take the cheapest offer on the outsourcing table. You don’t have to take an offer from a freelancer in a country different to your own if you don’t want to. Ultimately you take the offer that offers the best value, expertise and skill for what you are prepared to pay.

To successfully make the most out of outsourcing, a business owner needs to decide 2 things – 1. What processes they have that can be easily outsourced (and easily managed); and 2. How much they are prepared to pay for it. Most business processes outsourced via the internet tend to be along the lines of logo or website designs, bespoke software development, admin and data entry tasks, marketing, call messaging, with Virtual Assistants being touted as the next revolutionary outsourced occupation. With Virtual Assistants for example you can have your minutes typed, meetings scheduled, out of business hours calls answered, and all by someone who may live in another state or another country.

How much a business is prepared to pay for outsourcing services differs from business to business, but this decision must be approached sensibly. A business owner with a limited budget may find that choosing someone who charges only $10 per hour may not necessarily deliver the quality of work required, ending in added costs involved in getting rework down by someone else who charges $40 per hour for example. In saying this though, hourly rates quoted by freelancers do not necessarily define the quality of work that may be delivered (in some cases the quality of work carried out by a $10 per hour freelancer can be vastly superior to that of one who charges considerably more). At the end of the day to ensure the outsourced work is completed to the expected standards and requirements, business owners need to get a feel for a freelancers work skills, quality and ethics before deciding on the right person to fulfill their allotted task.

The most common form of internet based outsourcing is bid based. Project details are posted on freelance marketplaces by business owners and prospective freelancers with the required skill sets bid on the project – listing the services they offer, examples of their work etc. The business or ‘project owner’ then looks at the offers on the table and chooses a winning bid that matches their requirements and budget. By outsourcing work in this way businesses get the change to have enquiries of interest come to them instead of having to spend countless hours tracking down companies to get quotes.

By embracing the modern technology of the internet, businesses can free up time during their working day to spend on future planning and business growth – the flow on effects of which can be increased productivity, increased workforce, and increased profits.

Embrace the internet by outsourcing and ultimately you will give your business time to think.

Outsourcing and Recession – What is the Connection?

Outsourcing is defined as subcontracting a process such as accounting, payroll or tax preparation services to a third party.

The main criterion for outsourcing is:
a. Making better use of time and energy; or
b. Redirecting or conserving energy directed at the competencies of the business; or
c. Make more efficient use of resources.

So, how are recession and outsourcing connected to each other? To understand the connect between the two, we would have to delve a bit deeper into recession and its impacts.

Normally, economists declare recession for any economy if there has been a negative growth in the GDP for more than 2 quarters. Because of the negative growth in the GDP, people normally take defensive actions to protect the outflow of money which in turn goes to aggravate the sluggish growth further.

The solution to beat recession therefore is to create opportunity for having higher margin from lower costs.

In a recent survey done by Offshoring Research Network (ORN) in alliance with Duke University and PricewaterhouseCoopers, 40 out of the 100 companies interviewed said they plan to put pressure on service providers for more favorable contract terms in order to trim costs. In fact the conclusion of the survey is summarized as “Enhancing efficiencies has become more urgent in recent months as pressure on margins forces companies to increase productivity while spending less.”

This bears direct testimony to the fact that during recessionary times, it is more feasible for business to opt for outsourcing and create higher margins in order to pump liquidity inside the economy.

However, it is pertinent to understand that any outsourcing which involves capital outlay like some IT projects will definitely be impacted adversely. The areas that can be looked as prime targets to be outsourced would be services like project designs, bookkeeping, tax preparation services, AR & AP services etc.

It is thus safe to assume that the entire accounting function may be considered to be outsourced by businesses in order to reduce costs and increase profitability.

Businesses will however do more research during these recessionary times before deciding to outsource accounting and will opt for an outsourcing vendor only if:

a. There are visible gains in outsourcing the services.
b. The outsourcing vendor shall not charge any avoidable costs like initial set up charges.
c. The outsourcing vendor shall be able to provide value added services which can directly be converted into profitability.

Many of the outsourcing vendors have therefore taken extra care to ensure that businesses in US are able to tide over the tight fund situation in these recessionary times.

At many such outsourcing vendors,

a. There are no initial set up fees.
b. The pricing is lowest among all the outsourcing vendors.
c. There is a lot of flexibility in pricing that suits any need of a business in US.
d. The staff members are highly trained are proclaimed experts in bookkeeping and accounting.

Thus, it makes sense for a business to outsource its accounting function and beat the recession blues.

Steve is a qualified accountant (Indian CPA) and co-founder of APT Services, the fastest growing outsourced accounting service provider in India. Steve has over 10 years of expertise in audits, accounting (both US & Indian GAAP), payroll and tax preparation services.

How to Outsource Data Entry Work Effectively

In today’s world it is a well known fact that many businesses now outsource data entry work. All businesses are concerned with the running costs of their business as well as keeping clients and staff happy. One of the ways to achieve all of these goals is to use outsourcing techniques, which are growing in strength each year.

Outsourcing is now a staple part of business life. Whether you are a large conglomerate or a small office based business, there are aspects of your business which are already outsourced. For example, you may likely have a contract with a cleaner to clean your office or gardener to tidy up that hedge.

It is true to say that many larger businesses have the time, resources and money to invest in employing their own in-house own data entry specialists. However, mid-sized and smaller companies need to be able to operate at the same level as the large companies, but with less money, time and resources. This is where they can benefit from outsourcing this kind of work.

If you want to outsource data entry work, you need to firstly analyze how much it is going to aid your business. Is it necessary for your data entry work to be outsourced? You need to have a solid idea of your future business plans and work out where the data entry outsourcing fits into the plan. You need to do a lot of research and communicate with prospective outsourcing companies or individuals. Do not be afraid to ask questions; it is your business at stake should anything go wrong.

By outsourcing your data compilation work, you are taking care of many business related issues. Many data entry specialists either work as independent freelancers or may be part of a company specializing in outsourced data entry. This results in lower costs for your business; you are likely to receive a quote from an outsourcing company that is very competitive. If the work is an ad-hoc project, you may find that a freelance data entry worker is the cheapest option.

As the years have shown, outsourcing has proved a viable and advantageous option for many businesses. Whether it is employing a call center supervisor or a data specialist, your lower core competences can be dealt with by outside help. This leaves you to concentrate on the core competences that are of higher importance to the business and allow you to use your valuable time wisely.

Outsourcing is also a lot cheaper than employing in-house staff. The companies that offer to outsource entry of data have skilled workers, who can increase productivity whilst keeping your costs to a minimum. There is also the advantage of focusing your in-house staff; if you outsource data entry work it will allow more interesting, less-time consuming and important projects to be enjoyed by your own staff.

New technology is also emerging each year in the business world. By employing companies to outsource data entry projects you can eliminate some of the risk, save some time and some money. Many outsourcing companies have the latest technology in order for them to keep producing world-class results for their clients.

Implementing the Financial Outsourcing Scorecard

Developing and processing the financial outsourcing scorecard is not something that is easily achieved. There is a process that is carefully evaluated that comes with this procedure and much emphasis should be placed on the phrase “carefully evaluated”. This is because the tiniest mistake can either make or break whatever future prospects that the organization holds. Thus, both of the partners involved need to understand all aspects of the outsourcing job at hand – the causes behind such outsourcing, the costs incurred, as well as the benefits that both partners have the potential of enjoying. With that said, it is by far very important to focus on the assessment of the whole process. It would then be highly appropriate for the scorecard to have the following perspectives to look into.

SCREENING

The parameters used in the perspective of screening would all be geared towards getting rid of partners that are not suitable to the job being outsourced. Why would you go with a partner that you do not deem competent enough to handle the rigors of the job that you want to outsource in the first place? Screening should then be one of the first perspectives to look into. Some metrics to include here can be technological competency, infrastructural competency, staff training, learning ability, number of support systems, and redundancy factor.

OUTSOURCING PARTNER CAPABILITY

These metrics are all about gauging the capabilities of your outsourcing partner. Not only that, for this metric should also look into how compatible your outsourcing partner is with the existing circumstances of your enterprise. Examples of metrics in this perspective include expectation fulfillment ratio, migration index, streamline index, accuracy meeting ratio, and preset requirement conformance.

OUTSOURCING PROCESS ASSESSMENT

Of course, there would come a time when both outsourcing partners would have to take a good look into the whole outsourcing process and then assess or evaluate it. This is usually done when the outsourcing contract is almost up or expired so that they can better determine if a renewal of contract and services is in order. Parameters that you can use here include decision-making alignment, cost savings ratio, ongoing accounting savings, and task outsourcing fraction.

BENEFITS FROM THE OUTSOURCING JOB

The metrics included in this perspective would be all about the benefits that both partners have the potential of enjoying. An outsourcing partnership or agreement, after all, brings forth a lot of convenience and savings for both partners. Thus, it would only make perfect sense to look into the benefits that both can enjoy from the outsourcing agreement. The metrics that you can use here include quality assurance index, increase in activities, as well as the number of data security measures that have been adopted.

You might also want to consider going the extra limb and look into using a dashboard instead of just the financial outsourcing scorecard. There are a lot of dashboard applications that you can find over the Internet so finding one would not be too hard. Just make sure to go for the software or application that provides you the metrics, features, interface, and the like that your enterprise needs.

10 Tips on Outsourcing Online Projects

“It is vain to do with more what can be done with less.” – William of Occam

Globalization and the Internet have made it possible for anyone to tap talented workers in emerging economies at a low cost. Why pay for a job in dollar figures what can be done remotely for rupees. Today, virtually all large companies outsource portions of their business development to other nations.

Thanks to the Internet, outsourcing is now available to the rest of us as well. I know of many startups and individuals, like myself, who have had considerable success outsourcing. I have integrated outsourcing as part of all ongoing projects – and recommend it to any individual or business that hasn’t done so yet. When done right, outsourcing will save significant amount of time, money and stress.

There are risks involved, however; micromanaging an incompetent employee living in an inverted timezone can be stressful. Or worse yet, there is a risk of getting stuck with an employee who stalls the project until it ends up costing more money than it was meant to save.

These issues, however, are not problems with outsourcing itself, but rather with the orthodox approach used to manage an outsourced project. The tips suggested in the following paragraphs will help you develop an outsourcing strategy to get quality work done for less.

10 Tips on Outsourcing Online:

1. Check Employee’s Background

Choose someone with a high credibility and at least a dozen projects completed on the site. Websites such as, Elance, RentACoder, and ODesk have expert rating tests service providers can take to prove their credibility.

2. Start with a small project

Unless you have worked with a coder before, start with a small project. Remember, you cannot outsource passion. Your employees don’t share the same enthusiasm as you do for your project. So communicate expectations and divide the work into small chunks so that they may stay motivated and demand less micro-managing.

When hiring, prefer workers who ask questions to those who do not. Questions show they are interested and already thinking of your needs. Those who do not ask usually end up chucking half baked work at you; ‘guessing’ instead of ‘knowing’ what you need without really caring.

3. Don’t let the lowest bid intimidate you

Plan your project and work out your priorities. While it is great to negotiate costs, when you are finally hiring, be sure you are hiring the right person for the job. Do not let a low bid lure you into hiring.

4. Claim Intellectual Property

Make sure the project contract includes the ownership clause that tells the employee that you own complete rights to the work once it is paid for. RentACoder and Elance have a default clause written into the contract. This will avoid potential copyright complications later on.

5. Provide the big picture

It is your job to share the project’s vision. If you are able to clearly communicate the project goals things would go far smoother than they would if you were directing a project from the seat of your pants.

6. Set a schedule for status reports

With preset status reports, you can keep track of the project’s progress and it is then easier to keep the outsourced employee motivated. Time saved for them is time and money saved for you as well.

7. Clearly define what constitutes completed work

Test and retest the deliverables before you finally pay the employee for the work. When possible, work out a support clause with the coder for help after completion of the project.

8. Follow the rules

It might seem easier to just chat with the coders you hire and get your point across but sites like RentACoder.com insist you correspond everything you agreed upon through your project thread. If your correspondence is not in the arbitrating website’s record then do not expect them to take your word for what was agreed.

9. Time zones can make or break your sleep

When choosing a worker, it is important to keep the time zones in mind. Make sure there will be times when you can communicate with the coder in real time if necessary. Prefer someone from the same time zone as yourself (for North Americans, hiring someone from South America makes good sense).

10. Prefer freelance workers over outsource firms

Freelance workers are better motivated since they are working for themselves, and they are not top heavy as most Indian outsourcing firms turn out to be. Outsourcing firms will bid for projects their teams are incapable of finishing; many will brute force their way into finding a project by spamming potential employers with irrelevant samples of work.

Freelancing coders on the other hand are more likely to only take up work they can complete; plus, they remove the non-technical middle man.

Conclusion

I have outsourced everything, from copy writing and marketing to software development and graphic designing. The research material for this article, for instance, was compiled for by my virtual assistant. Surprised? Don’t be. I would be surprised if the likes of Timothy Ferriss wrote the entire book, The 4-Hour Workweek, without the help of an outsourced editor.

If you have a great idea, don’t let your lack of skills, or even time, stop you from executing it. Yes, outsourcing can be challenging, but the benefits far outweigh the potential risks once you know how to use it to your advantage.

IT Outsourcers Turn Green

Intel co-founder Gordon Moore was a great visionary. In 1965, his prediction, popularly known as Moore’s Law, stated that the number of transistors on a chip would double about every two years. More than 40 years later his prediction continues to hold true, as the IT industry continues to develop at an exponential rate.

Many see this as an example of progress and development, however there is a growing concern that the never ending pursuit of technological advancement is taking place without an understanding of the environmental impact of the changes. There are multiple valid reasons for this concern, but one of the main ones is incredibly simple; the more technical devices in circulation, the more power is needed, requiring increased energy requirements and therefore increased CO2 emissions.

Organisations are increasingly beginning to consider the environmental impact of their actions, partly as a result of the increased importance of a green corporate image, but also as a result of the rising cost of energy. The cost of powering a server over 3 years, is now more than the cost of the server itself and economic pressures are very efficient levers to direct action. As a result, environmental concerns are creeping higher and higher up the strategic agenda.

Initially, corporations looked internally for sustainability and environmental efficiency, however there is now a growing realisation that this concept should be extended to a companies wider organisational eco-system and that responsibility should now be extended to the supplier community that support their business activity. This is particularly relevant to IT suppliers who provide outsourced IT services, often from geographically remote locations, where from an environmental perspective out of sight has previously meant out of mind.

According to a recent study carried out by Brown & Wilson, authors of the “Black Book of Outsourcing’ organisations in North America and Europe plan to continue their outsourcing initiatives while cautiously shifting functional responsibility for corporate environmental concerns to the supplier. However the report also points to an increased appetite and demand from buyers of outsourced services for more comprehensive green initiatives to assure compliance.

The report is based on an independent study of outsourcing industry decision makers and analysts with a survey of 20,000 outsourcing users. Almost half – 43% – of companies choosing to use a supplier for the first time included green factors in their decision making process for choosing suppliers. And more than 94% of executives from listed companies are planning to add “green” clauses in their renegotiation processes, compared with only 36% of privately owned companies.

More than 88% of executives said that the environmental commitment of suppliers would influence their outsourcing selection process. And 21% of US and European companies that already outsource have added green policies and performance indicators to outsourcing agreements this year, according to the research.

Almost 25% of companies are asking their vendors to reduce their carbon footprint to have “zero impact”. Further, 45% of companies expect suppliers to assure public trust by tracking and demonstrably measuring green effectiveness. Over 40% want outsourcers to develop new green technologies, products and services, which reduce wastes, save energy and increase efficiency.

Sun Microsystems has designed new datacentres in US, UK and India to lower the company’s power consumption. Sun estimates that the company’s datacentre efforts will save the planet nearly 4,100 tonnes of CO2 per year and trim one percent from Sun’s total carbon footprint.

IBM is also following similar initiatives to make computing more energy efficient and environmentally friendly. IBM is committing to spend $1 billion a year on a project named “Project Big Green” and have developed a five step programme for companies looking to cut power use in datacentres.

Fujitsu is also setting an example, spending £44 million on a 65,000 square foot London based datacentre facility that has minimised its carbon foot print through the use of the latest IT cooling and processing technologies. Fujitsu predicts that this will save enough electricity to power as many as 6,000 homes annually, equivalent to saving 10,000 tonnes of CO2 each year.

Rackspace the IT-hosting company is also busy reinventing itself as a green supplier. It is building a new data centre in Slough and is doing as much as it considers practical to achieve carbon neutrality. Rackspace gets its electricity from Slough Heat and Power, which switched from coal and gas to wood chips and fibre fuel in 2001. Rackspace is designing its new centre so that separate sections can be cooled independently. It will also draw on external fresh air when conditions allow. Rackspace has also been busy outside; they have been planting trees – some 300 per month – to offset their carbon emissions, as well as using less power hungry computer equipment internally and adopting re-cycling and re-use across their offices.

As consumers become more environmentally aware, retail organisations are improving their environmental campaigns and promotional activity. Marks & Spencer has pledged to be carbon neutral by 2012. The supermarket Tesco plans to include carbon footprint labeling on all of its products. Online bank First Direct has installed new technology to reduce its use of electricity and airlines such as EasyJet are working hard to convince passengers that they can still fly with a clear conscience.

In the retail industry, consumers have ultimate power and retailers will respond accordingly. With outsourcing the consumer is one or two steps removed, but with improved communications technology, an organisations inner workings and standards are easily accessible and quickly distributed. Being environmentally unfriendly is now bad news and this social acceptance together with financial pressure to use less energy has created a real change in the supplier market place.

Outsourced service providers are increasingly beginning to realise that “Green Credentials” are a pre-requisite when it comes to dealing with large corporations and the supplier community companies are now investing heavily in reducing their carbon footprint.

Of the 4540 supplier firms analysed in The “Black Book of Outsourcing Report” the following 10 organisations are ranked as the most environmentally friendly within their particular area of expertise and given the increased importance of green credentials, this is an accolade that should not be under estimated:

1. Accenture & Accenture HR (Score 9.66) Services: ITO, BPO, HRO, FAO, KPO
2. CSC (Score 9.54) Services: ITO, BPO
3. Hewlett Packard (Score 9.49) Services: ITO, BPO, FAO
4. SAIC (Score 9.41) Ser
5. Logica CMG (Score 9.37) Services: BPO, ITO, KPO
6. IBM Global (Score 9.35) Services: ITO, BPO, FAO, KPO
7. Pitney Bowes (Score 9.30) Services: Document Processing Outsourcing
8. UPS Supply Solutions (Score 9.28) Services: Supply Chain & Logistics Outsourcing
9. Johnson Controls (Score 9.26) Services: Facilities Management Outsourcing
10. Unisys (Score 9.21) Services: ITO, BPO

Purchasing organisations are beginning to flex their environmental muscle. This may be for altruistic, socially responsible reasons, or it may be as a result of rising energy costs and increased financial pressures, either way the tide is turning, awareness is increasing and technology outsourcers are slowly turning themselves green.