The Death of Outsourcing
Posted on January 8, 2007
Filed Under Business, Web Development
I guarantee that you are doing more of the work for you business than you need to be doing.
There are two very important keys to running an efficient online business.
- Out-tasking (not outsourcing)
- Systematizing any repeating processes (we will cover this in a later article)
You should have noticed that I didn’t say outsourcing. That is very important. We’ve attempted to outsource entire projects multiple times and have had numerous problems every time.
The key to efficiently getting things done in your business is out-tasking.
Out-tasking
Out-tasking at its root is simply breaking down a larger more complex project into simple pieces that can be done by a specialized third party. We’ve been doing out-tasking for years but I typically called it outsourcing. It wasn’t until I read Rich Shefren’s Internet Marketing Business Manifesto that I learned that we had actually been doing what he called out-tasking not outsourcing.
By breaking things down, you immediately notice the tasks that you don’t need to do yourself. You’ll actually find three types of tasks.
- Tasks that should be out-tasked
- Tasks that could be out-tasked
- Tasks that shouldn’t be out-tasked
The hardest type to deal with is that second type. The tasks that you know you could get out-tasked but are not sure if you should. This may be because of the importance of the task or because you actually enjoy doing that task.
Just remember the more 2’s that you can make 1’s, the more time you will have to get the 3’s completed and focus on the more important aspects of your business.
Here is a quote by Rich that we’ve adopted as a foundation for how we make decisions in our business.
“All complexity is based on inherent simplicity. Elegant solutions can
be surprisingly easy to apply and phenomenally successful — but only
after ineffective traditions have been stripped away so common sense
can prevail.”
- Rich Schefren
Keep that in mind anytime you take on a new project or are struggling with slow progress or what I like to call task overload.
Every project has those certain tasks that could be done by anyone.
Remember, time is money so make sure you are treating it that way.
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2 Responses to “The Death of Outsourcing”
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Couple of points here:
1. One Billion population does not translate into 1 billion workers.What percentage of 1 billion is employable in IT?
As a mid level manager at one of the largest IT providers, I am struggling with quality of resources and the ability to procure them.
2.From an employee standpoint, why should an offshore resource work with an Indian IT vendor when she has better options such as Accenture and other MNC firms with better work life balance/compensation?
3.With MNCs ramping in India up the cost of labor will continue to increase eating into profitability of Indian vendors.
4.Indian IT companies are risk averse when it comes to making value added acquisitions, ( exception here is Wipro which has made some bold moves)
5.Moving up the value chain will continue to be a pipe dream if Indian companies try to build scale/value organically.
6.Rupee appreciation and wage appreciation can kill margins. Remember the Ireland story,Ireland was one of the pioneers in offshore call center services !!!
7.What would help India eventualy is the demographics. The developed world is greying. If you need English speaking programmers at a reasonable cost India is the option. Others countries simply do not have the scale. At some point due to the labor shortage in US and rest of the world the Indian IT vendors would be able to charge more for services. Actually this is already happening making Indian vendors more complacent.
THE REALITY IS THAT INDIAN IT VENDORS STILL CONTINUE TO BE BIG BODY SHOPPERS PLAYING WITH DEMAND AND SUPPLY OF RESOURCES,UNLIKE WHAT THE BUSINESS “PRESS” IN INDIA AND NASSCOM WOULD LIKE US TO BELIEVE.
I think it is more of a financial move for the company to outsource.