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Outsourced Business Processing
Vs Inhouse Development

In an ever changing economic climate, where the fast paced, sales driven, marketing focused and analytical businessman seeks to increase his customer retention, whilst increasing sales, but ultimately at a lower cost. The challenge then becomes how can this become a reality and not just something on a piece of paper.

 

Often businesses may look at their inhouse teams, developing them and adding new personnel. Others may consider external companies to outsource their workload and subsequently streamline their productivity. Is there a right or wrong way to do this and what impact may this have on my business is a question that is often asked by most managers and business owners alike.

When comparing an Inhouse team and looking to use an outsourced team for your business processing, there is usually a number of reasons why you have got to this stage. Notoriously the most common reasons can include cost cutting measures, competitive advantage, business growth, or even looking to achieve your yearly business goals in the most effective way.

At Quantanite, we therefore believe that there are 6 fundamental considerations when choosing how to improve your business process outsourcing strategy;

When comparing the cost-effectiveness of your in-house team to that of an offshore provider, it is important to not just consider the obvious.  Most people will only consider the cost to pay someone a wage vs the cost-per-head of an outsourced person. Whilst this gives a basic comparison, it is also important to consider other variables such as business productivity and time efficiency, as other costs incurred in using an inhouse team can include things such as;

 

  • Cost to hire: Human Resources cost, job advert costs, time to find the necessary staff

 

  • Cost to train and implement staff: The physical cost to provide training materials for these new staff, as well as the cost for the time spent by either yourself or HR personnel. NB: Its key to also remember that you may end up paying a wage for 2 weeks, where they are training and not productively doing the required tasks

 

  • Cost to manage staff: Cost on your time to oversee there work when you could be best utilised elsewhere

 

  • Holiday pay: Inhouse staff require holiday pay, whereas with an outsourced team you only pay for the time worked

 

  • Cost of equipment: Do you require additional computers, system licenses, chairs and desks for your larger inhouse team

 

  • Cost for additional floor space: Do you have the capacity for additional people or do you need to rent additional office space

Customer Experience (CX) is an ever growing priority for businesses in every industry sector,  as it influences not only their potential online and offline conversion rates, but it also has a huge impact on customer retention. As the importance of a businesses Customer Journey (CJ) grows, so must the potential Outsourced Businesses or Inhouse teams understanding so that they can be empowered to help improve its delivery.

All businesses require and expect a certain amount of employee churn to ensure that they maintain high levels of motivation and subsequently ensure that ‘fresh blood’ is injected to generate new ideas and working practices which will, in turn, help the company grow. However,  it is important to remember that there are 3 reasons why people will leave a business and their job;

 

  • Dissatisfaction in their current role/Company

 

  • Change in ‘home’ circumstances

 

  • Attracted by a new opportunity in a different company

 

It is important to consider how this inhouse role may affect your churn rate as well as be perceived by existing staff and those looking to fill the role. Is it a ‘stop gap’ for the employee or is it something they can do long-term.

 

This consideration is important, as the churn rate and retention of these staff members will impact the cost efficiency that was highlighted earlier. Therefore when looking for outsourced services you need to ask about the skill level of their staff, their employee churn rate as well as how they treat their staff as these impacts will affect the efficiency and quality produced for the campaign.

Whether you choose an outsourced team or decide to develop your inhouse team, the discussion of scalability is paramount to its success. The most obvious comparison is the outsourced team numbers and the ease of adding additional professionals on a cost effective basis V’s an Inhouse team that will require additional resources, time and HR, to employee, train and onboard them into the business.

Time management and the best use of your time is a constant consideration in any decision process. Especially when more often than not, we find ourselves saying “There aren’t enough hours in the day”. An inhouse team can sometimes be viewed as an ideal route as the hands on management is often see as most productive for that team. However, when compared to the value of your time and other tasks, it is often more a case of “Time would be better suited elsewhere”.

 

If freeing up your time is a major factor in the decision process then, then outsourcing to a company can definitely be the way forward. With the right company, you should be able to have a project manager in place that instills complete transparency, is communicative and essentially positions themselves as an extension of your business.

People and team management is often a cause for concern when trying to decide which option to take. This is often the case as poor management leads to poor productivity and poor results, which in turn creates a poor return on investment with whichever route you go.

 

Commonly, the inhouse option (despite more costly and less time efficient) is chosen as companies believe that they have a firmer grasp on business growth and have a better feel for the quality of the work being done. However, this is not always the case and provided that you find a well established and degree qualified outsourced team, then you can more often than not feel rest assured by their work ethic, ongoing communication and level of reporting that they can provide on an ongoing basis.

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