Advances in technology have helped businesses to cope with the demand of a rapidly-growing world population.Businesses have become dependent on technology to increase efficiency in their operations. With the advent of the Internet, businesses are increasingly going global.It is fast becoming a thing of the past that a business would have a department for everything. Outsourcing is now the norm for companies of all sizes. From small-scale operations with just a few employees to multinational businesses, there are a host of services that can be outsourced to third parties-- from payroll and accounts to IT and fleet managementthere is virtually nothing that the market does not have an answer for.But it is important to note that before outsourcing anything, it is necessary to consider the need for it and how it will fit into the business growth strategy.It is well known that outsourcing is cheaper and more efficient. Besides, it adds a new dimension to the business, which will improve either internal operations or offerings to clients.The Vice-President, Gartner Technology and Service Provider Research, Ms. Michele Caminos, says outsourcing is the assignment of one or more business processes to an external provider, who then owns, manages and administers the selected processes, based on defined and measurable performance metrics.She adds that it is recognised as an ongoing strategy whereby a firm acquires a strategic partner.According to her, outsourcing is best adopted after a careful look at business needs and available options. It is essential that the outsourcing relationship provides strategic business benefits in the future, she says.Caminos also says, Outsourcing provides a competitive strategy benefit in a number of ways to an organisation. It allows ease of management, reduction in cost, lesser manpower, and frees up internal resources.According to the Group Head, Human Capital and Administrative Services, Multi-Trex Integrated Foods Plc, Mr. Ola Azeez, outsourcing makes organisations to focus on key areas of the business potential that will have the effect of multiplying factor.He says that there are two main reasons to take a function out of house: it is cheaper and more efficient to do so, and or the service will add a new dimension to the business, which will improve either internal operations or the offering to clients.Business outsourcing is a viable option to businesses seeking to increase production at reduced costs. Technology makes it possible to outsource products and services at a lower cost.There should be control and tracking mechanism that will enable the people to carry out their duties and responsibilities as required, says Azeez.He also notes that there will be the need to review the business under the period of outsourcing, noting that it is best to avoid rigid contracts and ensure there is a period during which amendments can take place.To him, it is better to have a contract time frame of between six months to one year, except on special project of five years.A business adviser at Baker Tilly, Mr. Peter Lunio, says, Entrepreneurs usually get involved in contract negotiations, but often they dont have much experience of doing this; these deals are often several years in duration and can be a significant barrier to growth if you dont get the details right from the outset. I would advise entrepreneurs not to bet their businesses on such agreements.Azeez suggests that there should be a time frame for outsourcing.A solicitor at CMS Cameron McKenna and a specialist in outsourcing, Mr. Juan Crosby says, Entrepreneurs should certainly have a very close read of any contract, as they are often drafted in a very self-serving way. You should get advice if you are uncertain about anything, and get a lawyer to draft an agreement if the contract is for a service that is particularly critical to your business.With the help of technology, it is now possible to outsource just anything. Communication between overseas companies is no longer a problem for businesses the world over. A business can now outsource an aspect of its operation and keep track of it every day. There are scores of outsourcing companies out there capable of handling outsourced products and services.Azeez says business outsourcing has grown as an industry over the last several years, stressing that if one is thinking of expanding the business operation and the one wants to avoid actual expansion, then one should consider outsourcing the business.He further says that there is the need for shopping until one is able to get the right deal to suit the business. He adds that cost is not everything and that entrepreneurs should also be concerned that a supplier must be able to get a decent margin.Experts agree that it is necessary to have a trial period, especially for new or innovative services, whereas more traditional products normally do not have to go through such. He notes that outsourcing contracts are often long-term, so the supplier should be prepared to put in some efforts at the outset to secure such a deal.Azeez says that there is the need to ensure a benchmark for service. According to him, the reason for this is that one needs to be sure that the business is getting value for the moneyHe notes further that understanding the obligation of the business to the external company is vital. This means information is necessary for the smooth operation of the outsourced division, adding that understanding what, how, when, where and to whom this information needs should go is critical.Lunio also stresses that there is the need to set up a structure in the organisation to maintain the contract, adding, entrepreneurs often underestimate the amount of time it will require to maintain the relationship with a supplier.
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