First Steps to Outsourcing
Businesses, particularly those specializing in architecture and engineering, must make outsourcing a standard practice in order to improve performance.
To expound on the idea, the types, benefits, and methods to outsource provide the organization with the knowledge to utilize this beneficial instrument. This utility guarantees that work is optimized. By allocating the resources it has, the company becomes more productive, competitive, and efficient by directing the resources it has to the growth of its main activities.
What is Outsourcing?
According to Francisco Horiuela Morales, outsourcing is “public sector recruiting.” Special note should be made of supply and service contracts, which is a cost-cutting procedure in which an agency hires companies that specialize in providing specific services.
José Carlos Jarillo in his book defines outsourcing as “La Lógica Estratégica” as “the mechanism by which a company stops carrying out an expensive operation and subcontracts it to a third party who assumes the costs of personnel and required assets as well as carrying out the activities or services contracted.”
In essence, Espino-Rodrguez and Padrón-Robaina believe it is a strategic decision that entails contracting certain non-strategic activities or business processes required for the manufacture of goods or the provision of services through agreements or contracts with high-volume companies that can handle said activities or processes, in order to improve in comparison to other companies.
Outsourcing is NOT about other people doing labor, as key phrases like strategic decision, procedure, specialization, shifting functions to third parties, and cost reduction make evident. It’s about having the greatest talent and resources to complete certain jobs so that the company may focus on its core business.
Types of Third Party Contracting
● Co-sourcing: the contracted company and the contractor share responsibilities and risks within the agreed processes.
● On-site: the contracted services are carried out within the facilities of the contracting company.
● Off-site: the contracted services are carried out at the facilities of the contracted company.
● Offshoring: this model is also known as offshoring. It consists of hiring services located abroad, since, for example, labor may be cheaper or that country may offer lower taxes.
● In-house: This is the opposite of the Off-site typology, that is, outsourced services are still performed at the contracting company’s facilities, although they are executed by an external company.
● Reduce time and costs: There are many occasions in which a company offers services at a cheaper cost than that which another company could face when carrying out the activity itself.
● It allows you to focus your efforts on the most important areas.
● With its use, the company responds quickly to changes in the environment. Architecture and Engineering companies must be resilient. By outsourcing, they can foresee the changes they need to adjust to the times in which they provide services, since they are not pending minor or collateral tasks.
● Improving the company’s efficiency: By putting outsourced tasks in the hands of the best expert you can find, you can increase your productivity.
● Make mobility more flexible: The contracting company can decide when to subcontract to another company, continuing with its activity without causing any problem.
● Build shared value: Although it is one of the challenges of the hiring company to get the hired company to assume the values, the form and work dynamics.
First Steps to Implement Outsourcing
1. Determine which task is strategic and which is not within the company: For this, it is important to correctly prepare the Information Flowchart, so it will be known how the tasks flow and their order of importance.
2. Make sure that the tasks that you classify as strategic do not involve outsourcing: Focus on strategic tasks to find a way to win at your company.
3. Outsource non-strategic tasks. This will save time by allowing you to focus on the most important ones.
4. Investigate to find third parties with the best talents and resources: It was already mentioned previously that outsourcing was NOT about other parties doing work, but about having specialized resources for those tasks with which to gain in quality and optimization of it.
5. Don’t be stingy: Sure, hiring talent means you have to pay for it. And since you always get what you pay for, if you bet on who best performs the task, in the long term it will allow you to obtain both financial benefits and the perception of business value.
6. Perform tests and observe the results of the outsourcing: If you find that those third parties are not what they have told you, it becomes necessary to fire them.
7. Consider using media to attract talent.
8. That copywriting task should also be outsourced: Advertising fundamentally seeks to bring the customer closer to the product. Good advertising attracts customers, empowers and adds value to the brand. It is important to outsource this task in the hands of professionals who can provide all the benefits that the company needs in this area.
Other Elements to Take into Consideration when Outsourcing
To determine which activities should be carried out by external providers, the company must be clear about where its competitive advantage comes from.
An efficient, clear and precise contract must also be signed. A good contract is essential for the success of outsourcing, since this helps – according to Paula Angües Rodríguez in her thesis Analysis of Outsourcing as a business management strategy – to establish a balance of power between the client and the seller.
Furthermore, metrics need to be measured to control the process. The use of mathematical and statistical methods will always be reliable to define the efficiency of each task to be outsourced.
Finally, evaluate the results and analyze improvements.
Use Your Resources Efficiently
If you are new to outsourcing, you can follow these steps:
1. Determine which task is strategic and which is not.
2. We recommend to outsource non-strategic tasks.
3. Research to find third parties with the best talent and resources.
4. Don’t be stingy. You always get what you pay for.
5. Testing and see the results of the outsourcing. If you find that those third parties are not what they told you, fire them.
6. Consider using media to attract talent.
7. You may need to write “help needed” ads to attract talent.
8. Check for copywriting.
9. Perform strategic tasks to find a way to earn your business.
10. Once you find your way, find the best talents and resources to do it.
Any Architecture and Engineering firm must have a well-coordinated action plan that focuses on both short- and long-term goals.
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Then there is nothing more to think about, it is time to act and have a provider like PASconcept, the ideal tool for the administration of one or several projects focused on Architecture and Engineering companies.