itb-nz logo
Story image

Outsource everything….at your peril: Part 1

Outsourcing is a bit of a yo-yo for a lot of companies: depending who is in charge, none, some, or all requirements are considered at one time or another for placement with service providers.

And the levels of outsourcing vary over time, depending on variables as broad as the state of the economy or as narrow as personal preference.

Donovan Jackson attempts to determine where to draw the line, therefore, answering a ‘how long is a piece of string’ question…

Technically, most businesses can outsource almost everything. It’s not that absurd a proposal either; in the popular book ‘The Four Hour Work Week’, author Timothy Ferriss makes the case for personal liberation through the application of the Pareto Principle.

By focusing efforts on the 20% of activities that create 80% of value, he posits, results in an optimal outcome for the individual – and, arguably, for the business, too.

So what goes into the typical business? A great deal more than the activities which actually earn money.

From seemingly arbitrary functions such as cleaning – necessary for every company – to more specific ones like payroll and administration, there are a considerable number of services to make it all work. This being the 21st century, information technology is something just about no company can do without.

Of these functions, should you outsource it all? Or, rather, could you outsource it all? These are not questions with simple answers; indeed, it is a moving target, agrees Stace Hema, MD of Oxygen IT.

“The lines are always moving in this area. It all depends on the individual customer,” he says.

As an outsource service provider, he gives a little insight into how to make the decision:

“We have a pretty thorough client request sheet that, when entered right at the time of consultation, shows the clients some projections for outsourced versus owned," he says.

"It helps decide where to draw boundaries and limits wishlists; it also helps us to provide useful recommendations.”

For the next installment visit Techday on Friday