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馃懃 Insourcing Vs Outsourcing in Small Business - YouTube
Channel: Prianka Dillon Dosanjh
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i read an article earlier today talking
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about insourcing and outsourcing before
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i go into my thoughts let's just confirm
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the definitions outsourcing is when a
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company hires an external third party
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like a pr firm or an i.t solutions
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business to complete a task or project
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or take over a continuous function for
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the company insourcing on the other hand
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is when the company's tasks and projects
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and continuous processes are all handled
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internally even if you're hiring new
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people or creating new departments is
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the only solution the question that
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follows is which is better for a
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business outsourcing or insourcing
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before i give you my answer let's cover
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the pros and cons of both with some use
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cases in case you want to skip all of
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this to my answer you're welcome to use
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the timestamp below the reasons why
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businesses may choose outsourcing
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assistance over in-sourcing tend to be
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based on factors such as cutting out the
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costs associated with hiring new
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employees
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workload reduction for internal teams to
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prevent burnout enabling employees to
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concentrate on core business functions
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while external parties take care of less
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critical duties having new needs in the
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business and there isn't an internal
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team who have the skill set to manage it
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yet saying that the challenges that come
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with outsourcing include the risk of
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external parties controlling and dealing
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with sensitive data communication is a
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challenge with external parties it tends
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to have to go through one or two
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selected people on a team which can
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sometimes create an inadvertent
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bottleneck you need to be explicit in
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explaining brand points and costs can
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spiral if the project unknowingly
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expands examples of the most common
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cases for outsourcing that i have used
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are payroll marketing functions such as
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design image or video capture it support
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and hr contracts management when it
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comes to insourcing the idea is you
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spend the investment internally and
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expand your management remit to cover
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this new business the reason why a
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business would choose this option over
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outsourcing is when it's more important
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to have control over the decisions that
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go into the task and projects existing
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employees are already familiar with
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brand messaging and brand experience and
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won't need to spend additional resources
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on training them communication to
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external third parties will be too
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tricky to manage and the risk of
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sensitive data being mishandled is
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something you're not prepared to take on
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now before you rush to insource please
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know the challenges you might face
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insourcing can also become costly if it
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requires hiring new talent or creating
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new departments to be responsible for
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specific tasks and projects existing
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employees can also become burnt out if
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they're assigned a heavier workload to
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accomplish these projects changing a
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course of action is harder when
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considerable steps have to be taken to
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prepare for change internally so you'd
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better be certain this is what you want
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to do examples of when in-sourcing is a
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good option include when a company is
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expanding into new markets but its
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marketing team is unfamiliar with the
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language in the new area maybe and so in
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order to meet the needs of the new
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market the company hires a new team in
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that territory that speaks the language
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and will create relevant marketing
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strategies to address the needs in that
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area another example is when a business
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wants to expand its line of products it
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can work with internal product teams to
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brainstorm new ideas and bring them to
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fruition instead of outsourcing the work
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to an external unit another example
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would be after scaling the business
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hires new talent experienced in payroll
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duties and creates an in-house payroll
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department since it can get too
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expensive to pay for this externally for
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a large company now let's look at all of
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this from the lens of a small business
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i'll give you my thesis up front
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i choose outsourcing before i choose
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insourcing i'd say 85 to 90 of the time
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in my early years in business i was
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perhaps a bit green i had a very naive
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image of what business building was i
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understood it to be all about having a
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bustling office with phones ringing off
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the hook and people hard at work trying
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to capture every lead that came into the
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business with shorter and shorter lag
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times between the moment the customer
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first contacted us to when we delivered
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our quotes every time i hired a new team
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member i thought they were the one to
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unlock the next level of the business
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truth is as i indulged in this
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insourcing heavy approach i got more and
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more absorbed into just trying to manage
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them all figuring out rotors signing in
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and out pay rates commission
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calculations conflict resolution and
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training oh it was all relentless the
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thing is what this meant was that i was
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absorbed in doing busy work more
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day-to-day management work rather than
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where my attention was really needed
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working on the business here comes the
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crux of it until your business has found
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a solid customer base and you can cover
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your expenses two three times over there
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really is no sense to be using your
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entrepreneurial might on just managing
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people choose outsourcing over
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insourcing 8 out of 10 times i am a
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strong believer that your startup funds
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and your initial business revenue should
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be used to cover the costs of
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outsourcing services for your business i
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like this approach for a few reasons
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first
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when you are repeatedly using outsourced
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services you have to get really good at
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explaining what you do and need this is
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an undervalued skill that we get lazy
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with when we have an internal team being
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able to define the project and its
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deliverables is massively empowering
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later down the line next outsourcing
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tends to have enough of a saving for the
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early days but becomes a cost-saving
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opportunity for you when the business
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has grown past a certain point and then
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it's more feasible to bring these
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services in-house payroll is a perfect
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example for this for a few people having
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a payroll manager on the team does not
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make sense for a team of 50 or 100
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it's a different story next outsourcing
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services lets you rethink and pivot
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quickly if something isn't working
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whereas if you have a newly recruited
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team member or worse a designated
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department in-house you are held hostage
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by this decision and closing the
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position or the department down just
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because you may have got it wrong it's a
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lot harder and worrying for the
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remaining team members to observe
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finally outsourcing lets you hire pros
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into your business to show you the level
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you want any future internal recruits to
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have or exceed if you hire a team on the
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books without knowing the difference
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between a job well done and a poor job
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you are in for a rocky ride for sure
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outsourcing is like getting niche
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consultancy services for each aspect of
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your business i use my instructions and
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work experience with outsourced talents
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as the basis of my standard operating
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procedures for those roles making me
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feel prepared and confident for when i
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do want to bring someone in as a
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permanent member of the team saying that
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with the trend of more and more people
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wanting to be self-employed and working
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on their own terms we very well may be
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heading into a space where outsourcing
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becomes a standard fixture in business
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with the development of cloud servers
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like dropbox and google drive and
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communication platforms like slack and
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asana it's now easier than ever to plug
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a third-party supplier into your
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business way more seamlessly than ever
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before i'm curious to know about what's
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your experience with outsourcing and
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insourcing until the next one you've got
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this
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hi i'm priyanka
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i feel like we're in a committed
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relationship i mean you have watched the
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videos at the end
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surely it's enough for you to subscribe
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now
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