10 questions to ask when outsourcing
Should you outsource certain parts of your business operations? Do the upsides outweigh any downsides? Here are 10 questions to get you thinking about the process.
While the past few years has seen outsourcing take off within the advisory market, notably to external research and investment management companies, discretionary fund managers, paraplanning companies, virtual private assistants, and so forth, using external contractors has both upsides and downsides.
While there are often clear benefits, particularly where outsourcing brings expertise to the firm it does not currently have or where it helps de-risk the business, is it always the right policy? David Shelton, business development consultant of Stoke Bishop Associates, provided us with a set of simple questions to help test whether a company could and should outsource.
1. Is the activity core or peripheral to your business?
2. Is it a source of competitive advantage?
3. Do you have the expertise in-house?
4. Are you confident you can manage the outsourced relationship?
5. Do you have staff capable of managing the outsourced relationship for you?
6. Will it cost less to outsource?
7. Will it reduce business risk?
8. Is there an opportunity to learn from the outsourcer and bring the activity in-house in the future?
9. Will the quality of the outputs be better than the in-house solution?
10. Can you use any time released more productively by outsourcing?
David said: “It is essential to quantify the answers wherever possible and to establish and provide any potential outsourcing partner with a written brief of your expectations.
“And review your outsourcing decision on a regular basis – changes in what is on offer and within your business might lead to a different outcome.”