offer state-of-the-art solutions to keep their customers satisfied. As a consequence, for a small monthly subscription fee, your business is always able to access the same cutting-edge solutions that were previously available only to the largest companies.
Outsourcing Doesn’t Mean a Function Is Nonessential
You may believe that if a business owner lets someone else handle a function or service, it can’t be as important as things done in-house. But that’s a misconception. The goal for any go-it-alone business is to provide a distinctive service or product that meets the needs of its customers. This doesn’t mean that every critical function—or every aspect of a critical function— has to be handled in-house. You are providing the customer with the result of your total business system.
Firms in many industries outsource important functions precisely because they want the benefits of an entity that specializes in a critical area. In the drug industry, clinical trials are an essential component of drug development, yet the industry is increasingly outsourcing this function. A unit of Pharmaceutical Product Development, Inc., for example, specializes in clinical trials for drug manufacturers and has worked with nearly all of the world’s largest 50 companies. Things are similar in the oil industry.
As one authoritative article on outsourcing notes: “Schlumberger offers such superior competency in drilling that oil companies have little choice but to outsource. Why spend more to do it yourself when you can spend less and get it done better?”
To determine whether outsourcing is appropriate for you, ask yourself this: Even if a function is critical to my business, can it be handled as well or better and cost-effectively by an available service? If the answer is yes, then you should outsource it. You will be competitively hurt if you don’t take advantage of available low-cost services. Your competitors inevitably will use these or similar services and will then have the time to focus their energies on their unique service.
