Why When Where How 2 WHAT IS OUTSOURCING Outsourcingthe practice of using outside firms to handle work normally performed within a companyis a familiar concept to many companies In todays highlycompetitive business world companies are using more contractors and consultants to perform specialized roles manage a portion of their business or supplement their workforce for varying workloads Many turn to outsourcing to cut costs And while its true that outsourcing can save money its not the only or even the most important reason to do it Wise outsourcing can provide a number of longterm benefits WHY OUTSOURCE Here are some reasons to outsource Specialized Skills The task is highly specialized and requires expert skills or systems Specialized Technologies The operation or task requires specialized technologies for operational efficiencies or you need to respond adapt and cater to the new and challenging demands of your customers Flexibility Scalability The task is seasonal temporary shortterm or there is a need to scale up or down quickly to meet workload demands Headcount Headcount restrictions and cost constraints create organizational stress points that can impact project deadlines and quality of work Cost effectiveness The cost of hiring inhouse can be prohibitive for undertaking multiple and diverse projects with demanding compressed deadlines This is usually because each project may not reflect a fulltime workload and hiring highly skilled fulltime resources for shortterm work is not the most cost effective Outsource or hire Not every project requires to be in office with fulltime or parttime staffing In some cases outsourcing your projects may give your business exactly what it needs 3 BENEFITS OF OUTSOURCING Many companies use outsourcing to fill roles in their organization that would be too expensive or inefficient to create themselves The biggest benefit of outsourcing is that you are able to bring in an expert for a defined period of time to perform a task Even if the hourly or project rate is higher than hiring an employee you may save thousands of dollars by not committing to an annual salary and benefits For longerterm needssuch as web portal design business app development or marketing activitiesthe benefit is that you gain operational efficiencies and skills that may be difficult replicating inhouse Heres how Aesbus outsourcing solutions can benefit your organization Reduce labor costs Hiring and training staff for shortterm or peripheral projects can be very expensive and newly hired employees dont always live up to your expectations Outsourcing to Aesbus lets you focus your human resources where you need them most Give your budget a break Outsourcing can give your budget a break With outsourcing you can set and control the budget for the tasks you need completed By contrast with inhouse employees you have to account for overhead costs that go beyond their basic salaries Start new projects quickly As an outsource provider Aesbus can assemble the professional resources with the needed skill sets to start a project right away Handling the same project inhouse might involve taking weeks or months to hire the right people train them and provide the support they need CLIENT SUCCESS STORIES Aesbus is your behindthescenes partner 4 Accommodate peak loads Outsourcing can be used to minimize fluctuations in headcount that could result from peaks and valleys in demand To protect staff from fluctuations in demand businesses should staff to the valleys and outsource the peaks Aesbus can be used to offload less interesting but timeconsuming commodity or endoflife work or to handle peak loads This leaves your staff free to pursue new developmental opportunities Focus on your core business Every business has limited resources and every manager has limited time and attention Outsourcing to Aesbus can help your business to shift its focus from peripheral activities toward work that serves your customers and it can help your managers set their priorities more clearly Level the playing field Most small firms simply cant afford to match the inhouse support services that larger companies maintain Similarly organizations with budget constraints within a company may not have the leverage to hire additional resources as needed Aesbus offers outsourcing solutions that can help small firms act big and budgetrestricted organizations have the flexibility to meet increased workload demands Outsourcing your projects to Aesbus can provide access to economies of scale efficiency and expertise that large companies or wellfinanced organizations enjoy Accountability Outsourcing is predicated on the understandingshared by business and vendor alikethat such arrangements require quality service in exchange for payment Paying for a business service creates the expectation of performance As an outsource provider Aesbus is well aware that this accountability has ethical legal and fiscal implications Reduce risk Every business investment carries a certain amount of risk Markets competition government regulations financial conditions and technologies all change very quickly As an outsourcing provider Aesbus continuously assesses and manages potential risk for you Gain leadingedge specialization Outsourced resources work with many different clients some of which are industry leaders They usually build a wider portfolio of uptodate expertise and experience to make themselves more marketable In return your organization can greatly benefit from these varied experiences 5 HIRING VS OUTSOURCING According to Businessweek Magazine employers can save up to 30 percent by contracting talent placement through an outsource provider because they avoid paying payroll taxes unemployment insurance workers compensation and disability as well as benefits that include pensions sick days health insurance and vacation time Using outsourced talent also gives businesses the freedom to better manage minimum wage requirements and overtime mandates as well Outsourcing is usually much cheaper You pay a contracted rate negotiated between you and the outsource provider You dont have to worry about trying to keep someone fully occupied in productive revenuegenerating activity every day You usually pay just for specific tasks or projects You dont have to calculate and pay sick pay vacation pay maternity leave healthcare insurance family leave etc You dont have to wade through the red tape that hiring and retaining employees involves You dont have to provide desks and office space You avoid office overhead costs such as office rent and phone charges and all the other little things than having an office involves Outsourcing can have a powerful impact on your organizations growth productivity and bottom line For every company the right time to outsource is different Some businesses have inhouse staff to handle daily activities but may need outside help to undertake new projects that dont warrant another fulltime employee When you outsource you can focus your time attention and resources on your companys core competenciesand spend your time setting new goals and finding ways to achieve them Exceeding expectations drives Quality Outsourced resources working on client projects commonly go over and beyond whats required Theyre used to working on highprofile projects under tight critical deadlines Their commitment to Quality is driven by client satisfaction Working weekends or odd hours to get things done ontime and onbudget is par for the course Aesbus B2B Tekkies Outsourcing solutions are hasslefree 6 Its useful to consider whether a function is better done inhouse or by an outside service provider To assist with that Aesbus has created the following comparative matrix Outsourcing Decision Matrix Area Employee Outsourced Resource Compensation Established by manager company Established by vendor Work Definition By job description By contract Work Measurement Terms Conditions By achievement of objectives for review period and team contribution Set out in ongoing employment contract By milestones or service levels established in agreement or contract Set out in agreement or contract for specific work Benefits Taxes Paid by company Paid by vendor Timeframe Permanent work not time bound Engaged for period of time or phase Negotiation Around deliverables standards timing cost Authority Around role career responsibilities growth salary By delegation Liability Company assumes Vendor carries Direction Provided by manager as required Provided by client per contract Performance Review LearningTraining Performed periodically on role includes behaviors skills Is part of the job Responsibility for Performance Bonus Manager shares responsibility for poor performance or failure Company assumes liability Manager has discretion Performed upon delivery against milestones or services levels Expected to be proficient learn at own cost or vendor cost Vendor responsible to deliver according to agreement May be legally liable for failure Specified in contract with requisite conditions Termination In accordance with employment law and for acceptable reasons Wrongful termination cases can lead to costly litigation Subject to requirements of contract and prevailing commitments Nonemployees are in effect ineligible to pursue wrongful termination and other litigious routes Litigation Granted and authorized in writing Outsourcing can be a gamechanger Break through the challenges of budget time and expertise with outsourcing 7 THE NEW ECONOMY The misconception that contractors are more expensive than regular employees is common Technical managers are not always aware of the true cost of hiring new employees However when considering the extra sometimes hidden resources expended in making a permanent hire outsourcing often makes sense In these turbulent times even the most stable companies are tightening their belts In the new economy companies will have to seriously look at which path makes sense for them hir