How to Outsource Virtually Everything
(And when you shouldn’t.) A small business person’s guide to bridging skill gaps for growth and profit
by Marzena Czarnecka
Maybe it’s the association with phone and computer companies and their not-always-satisfactory customer service experience. Or the horror stories of substandard working conditions in developing world factories. Outsourcing has a bad rap. But if you look around, outsourcing has been one of the macro-trends in business for the past 30 years. Technology has increasingly enabled enterprises to work together in different locations instead of under one roof, focusing on their core competencies and contracting out other functions to those who can perform them better, cheaper or both – in effect, more productively.
It’s the way we do business in Canada, which has established itself as one of the go-to outsourcing destinations in the world, third only behind India and Ireland. For Canadian and Alberta businesses, particularly small- and medium-sized enterprises (SMEs), this means that outsourcing can be a downright patriotic affair, connecting local SMEs and entrepreneurs with other local SMEs and entrepreneurs. And that kind of outsourcing is flourishing in Alberta right now.
Small wonder. For a business trying to grow during a labour crunch, outsourcing can add expertise and capability on an as-needed basis without adding to the overhead. And it’s not necessarily the mundane, mechanical aspects of their operations that SMEs outsource. These days you can outsource your marketing head, your CFO, even your CEO. Of course, it’s not always wise to do so. We took a look at a number of outsourcing options Alberta companies are taking advantage of.
Outsourcing – shifting activities that used to be done inside a firm to an outside company
Offshoring – the relocation of business processes from one country to another, while still keeping it within the company
Offshore outsourcing – shifting activities that used to be done inside a firm or outsourced domestically to another firm located in another usually lower-cost country or jurisdiction
BPO – business process outsourcing, the most common business processes in question being payroll and billing
ITO – information technology outsourcing
How to Outsource IT and the Internet
ALL MITCH KANO WANTED was a website to promote his southern Alberta bricks-and-mortar sporting goods and paintball stores online. He got a basic site up with a little help from computer-savvy friends. But it just wasn’t getting the traffic, much less the sales results, that he wanted.
For many SMEs and owner-operators, this is where they get their outsourcing feet wet. “Most companies don’t have the need for an in-house web developer,” says A.J. Byers, senior vice-president of business services for Primus Telecommunications Canada Inc. So they outsource their web work… and then things snowball. A one-man shop needs technical support but isn’t going to hire a full-time technical support person. Neither is a 12-person business. But someone has to keep that technology humming, right?
Enter the outsourcer, increasingly focused on what Byers sees as a still underserviced SME market, which Primus is targeting with web development and hosting services through to Internet security and VoIP (voice-over-Internet protocol) telephone systems.
Overwhelmed? You don’t have to buy into everything.
“The unique element that we offer to the SME market is essentially co-sourcing,” says Byers. “Many small business owners are uncomfortable with the idea of handing everything over to a third party. We built our processes with the client so that we actually co-exist. We manage a portion, the customers manage a portion,” and, in what he calls an a la carte approach, the customer chooses what’s outsourced and what stays in-house. Co-sourcing works for SMEs, says Byers, because it builds a relationship of trust between the business and its outsourcer and allows an owner-operator used to calling all the shots to move towards outsourcing “in small steps.”
Kano isn’t ready to put the modest IT and telecom needs of Section 8 Sports in the hands of a Primus-style outsourcer. But his search for a website designer has led him to outsource his Internet marketing to Karri Flatla, founder of Lethbridge’s Snap Virtual Associates.
One toe in…
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