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Outsourcing as a Strategy to
Grow Your Business

Outsourcing is a business process term for what has literally become known as hiring a
consultant, independent contractor, or freelancer to do a specific task or tasks for an
organization in which the organization either does not have the time or the expertise to do on
their own.

The organizations that have used outsourcing for many years know that with the positives it
brings to the organization that it is also important to have a well managed plan of action for
hiring a consultant or contractor for a business task. This includes deciding which projects or
tasks to outsource, whom to hire for these tasks, how to manage the project, how to agree on
payment terms, and how to achieve the desired results.

There are many forms of outsourcing ranging from outsourcing payroll to outsourcing package
handling, to everything in between. Small businesses hiring a self-employed accountant to
handle the corporate tax returns are in essence hiring a tax consultant. Large corporations that
hire outside customer service firms to handle their customer support are outsourcing that
function of their business to focus more on their core business functions. It is entirely possible
to outsource practically every business process within an organization.

Outsourcing Tools

There are a wealth of tools available for the organization looking to outsource business
processes. Companies such as SmartyLance.com, enable a business to post a project to a
project marketplace and receive bids from experts in the field. These type of freelance sites
match companies with freelance professionals, consultants, and independent contractors.

There are many advantages for a business to use services such as SmartyLance. First, the
marketplace enables businesses to use a centralized location to post their project, receive bids
on that project, communicate with potential providers, choose a winning bid (either based on
lowest cost or based on the credentials, expertise, or prior feedback of a particular provider),
manage the project specifications, receive the delivered project and make final payment based
on the terms of the auction. This centralized marketplace provided by SmartyLance greatly
streamlines the entire outsourcing process and enables the business owner or manager to
have greater control over the entire outsourcing process.

Increasing Competition

Competition is a complicated subject for many people. Ultimately, competition is good for the
consumer, whether the consumer is an individual or a business, competition enables products
and services to maintain high quality and low cost.

Although many people dislike competition because it forces action to improve quality, the
benefits to the overall economy even result in improved products and services for the very
people that dismiss competition and the headaches it sometimes brings. Freelance
marketplaces such as SmartyLance are no exception in that competition improves the overall
quality and value for the project buyer and causes the freelance provider to adjust to market
conditions in a practical, intelligent manner to win new business.

The benefits to the company looking to hire freelancers are obvious. For example, Company A
can compile a list of consultants to work on the design of their new company logo. This list may
include a multitude of design firms from the same geographical area. Company A would be
required to submit an RFP by contacting each design firm individually, stating the requirements
of their project and requesting a quote based on the requirements.

Many factors come into play in deciding which design firm Company A will choose. Chances
are, that using this approach, Company A will end up paying too much for the project and will
only have a handful of providers to choose from.

Company B also must outsource the design of their new company logo. Rather than compile
lists of design firms, which can result in overpriced quotes, Company B decides to post their
logo design project to the SmartyLance marketplace. Doing so enables Company B to get
competitive bids that help ensure that Company B gets the most competitive price for their
project. By posting the logo design project to SmartyLance, Company B not only reduced costs
associated with the project, they had access to specialists and skilled professional designers
from around the world that were competing to give Company B the best cost and highest
quality design for their money.

The entire process was managed easily through Company B's SmartyLance account enabling
them to keep in contact, manage project specifications, manage competing bids, and send
payment easily and securely through one of several different payment methods. An escrow
account enabled Company B to ensure that payment wasn't released to the provider until all
project requirements were met. Company B successfully outsourced the logo design project
and was able to save several hundred dollars. They also received the project several days
quicker than Company A.

In this example of Company A and Company B, we see that Company A had limited its ability
to find a skilled professional and limited its ability to save money on the project. Company B
took full advantage of all the resources and benefits of the SmartyLance marketplace and was
able to save time and money. By outsourcing critical business functions that are not core
business functions, the organization greatly benefits through a savings of time and money
which in turn benefits us all through decreasing costs that are passed down to the consumer.

To Outsource or Not to Outsource?

That is the question many small business owners and large corporations alike are asking
themselves each and every day. Risks are inherent in any new business strategy or thought
process.

However, like any business decision, risk can be managed. By intelligently choosing a provider
that matches your intended skill requirements, carefully detailing and outlining your project
requirements, and ensuring that you maintain the requirements within budget, the benefits can
far outweigh the risks.

One of the more common fears among some larger organizations that may be reluctant to
outsource projects is a fear of the unknown. This fear stems from the inherent inability to
oversee each and every aspect of the project from start to finish and to evaluate each step
along the way. Internal employees devoted to a project are more easily evaluated and can be
guided through performance and work appraisals. Managers may feel that outsourced projects
are more difficult to oversee and manage with an eagle eye.

The fact of the matter is that so long as there are well-defined contractual obligations and
project reporting requirements, an outsourced project can in fact result in a more manageable
outcome than actually thought.

Also, the talent pool and skills obtained that may be completely unavailable to the organization
allow the organization to reach milestones and achieve success that may never have been
possible with their current employees.

Outsourcing Controversy

The outsourcing controversy that is making headlines today is the public opinion of outsourcing
jobs to other countries. This includes manufacturing of products, such as those that are Made
In China as well as service outsourcing such as computer programming that is outsourced to
skilled workers in India. One can argue that outsourcing projects overseas is taking opportunity
away from workers in their native country. Others may contend that outsourcing projects,
whether it s overseas or in the same country is a great opportunity that will improve business
processes, improve productivity, reduce costs and have an overall positive effect on the
economy, thus creating more new jobs and specialized jobs in specific skill areas.

All businesses are consistently looking for ways to increase productivity and lower costs. From
an economic standpoint, increasing productivity and lowering costs are essential elements for
business success. Business success, in turn leads to more! growth, which leads to new job
creation, be it in a more specialized skill area or through the development in new types of jobs
in new specialized areas.

Outsourced Business Processes

As mentioned previously, practically any business process not related to the core business
activity can be outsourced. Some examples of commonly outsourced business processes
include:

 Accounting and Finance

 Graphic Design & Multimedia
 Sales and Telemarketing
 Web Design and Development
 Administrative Support and Data Entry
 Business Strategy
 Advertising
 Business Plans
 Consulting
 Legal, Contracts, Copyright, Corporate
 Incorporation Software and Technology
 Database Development
 Writing and Translation
 Copy Writing
 Creative Writing
 Press Releases
A Rewarding Career

Having a specialty or skill in a particular business area can enable you to begin a career as a
consultant or freelancer. Freelancing enables you to have the flexibility to work on your own
and on your own schedule. You can choose which projects match your skill set and decide
which types of freelance projects that you would be interested in working on.

There are numerous sources available to find freelance work. Some sources include browsing
freelance directories, job boards, and registering with talent auction sites such as SmartyLance.
All of these resources are filled with potential jobs.

In comparison, it seems that talent auctions are the most comprehensive resources offering the
most flexibility to both the freelancer and the company hiring a freelancer. They offer the
breadth and depth of listings and the simplicity to bid on numerous projects as well as services
enabling the handling of the entire payment process through a service provider account with
the talent auction site.

Bidding on projects requires much discipline and planning. Before placing a bid or giving a
quote on a project, the freelancer must take into account many factors including the length of
time required for the project completion, the budget the service buyer can afford, and whether
or not they can actually meet the requirements to complete the project.

It is also important to keep in mind that developing relationships with service buyers can lead to
more work in the future. Developing a relationship with service buyers and meeting or
exceeding their project expectations will enable you to develop a client base that allows you to
practically always have new projects to work on.

Competition for Projects

There will always be competition in all forms of business. Competition for freelance projects is
fierce. One of the major ways to compete and win is to make yourself stand out from the rest of
the crowd. You can start by fine tuning your resume. This will force you to think about your
accomplishments as well as your exact skills and abilities.

There are numerous services that can help you with your resume, including ResumeEdge.
Using a service to help you with your resume will enable you to better explain your
accomplishments and present them in a manner that will captivate and impress the reader.
Especially if you are an independent freelancer, having your resume retooled by ResumeEdge
will allow you to stand out in a crowded marketplace. Many freelance service buyers will wish to
see a list of your accomplishments and your skills. If you register as a service provider with a
freelance marketplace such as SmartyLance, they offer several different options that enable
you to stand out above the crowd.

First, there are different subscription levels when registering. There is a Limited subscription, a
Novice subscription or a Professional subscription. Each higher level subscription offers more
options to the service provider. Every service provider does have the ability to post a profile,
detailing various information about their abilities.

Limited subscriptions limit the cost range in which a service provider can bid. For example, a
Limited service provider can only bid on projects with a price range less than one thousand
dollars. Novice subscription service providers can bid on projects less than five thousand
dollars, and Professional subscription service providers can bid on any service level project.

Several added bonuses with the Novice and Professional subscription levels include the ability
to purchase credential verification services as well as the ability to post Buy Now projects.
Credential verification services enable you to post information related to your references,
certifications, licenses, education and previous employment. Simply adding these options to
your account gives you a special designation stating that your information has been checked
and verified as being true and accurate by the freelance marketplace. This designation gives
you an added level of credibility making you stand out from the rest of the service providers and
enabling you to showcase your achievements and abilities, giving a service buyer confidence in
choosing you to complete their project. This will undoubtedly lead to more work and more
projects coming your way. In addition to verifying your credentials, you have the ability to
showcase a portfolio of your previous work. This allows you to show the service buyers your
achievements and your successes with previous clients. Showcasing your portfolio is another
important aspect that gives the service buyer confidence in your ability.

Finally, the higher level subscriptions enable you as a service provider to offer Buy Now
solutions. Similar to purchasing products immediately without bidding as on major product
auctions such as Ebay, Buy Now solutions enable freelance service providers and consultants
to make a solution available to all service buyers for a specific set price. For example, a
freelance graphic design firm may create a Corporate Identity Package , enabling a service
buyer to purchase this package that may include the graphic design of a logo, along with
designs for letterhead, business cards, and banner ads. Another example could be from a
lawyer or legal consultant who creates an incorporation package that includes corporate setup
and incorporation services for all fifty states, creation of shareholder agreements, employment
agreements, and registered agent services all for a set price. These simple examples of Buy
Now services enable freelance consultants and independent contractors to create ! easy
options for service buyers who are looking for simple solutions and quick turnaround time.

Service providers also enjoy creating these type of services because it enables them to focus
on their core interests and abilities. Only higher level subscriptions such as the Novice or
Limited subscriptions enable freelance service providers to post Buy Now projects.

The beauty of these additional options as a freelance service provider is that you can focus on
one specific aspect of your business. If you are a consultant for a graphic design firm and you
simply enjoy creating and designing corporate logos and identities, then you can find work
specifically in this area by posting your own Buy Now solution. If you are a lawyer working for
your own legal firm and your passion is new business setups and incorporation services, then
you can steer projects your way with a Buy Now solution posted on a freelance marketplace
like SmartyLance.

Conclusion

These are only a few examples of the many opportunities that exist as a freelancer. Whether
you are a small business, an individual, or a large corporation, this article simply serves as a
guide to help you in your quest to use outsourcing to your advantage to help your business
grow and flourish.

Outsourcing, when done correctly, can benefit your business in so many different ways. The
two most obvious benefits are a savings of time and money. From the freelancer's standpoint,
this article has been developed to help educate and guide you with the many options available
to find work as well as to delve into the minds of freelance service buyers. Knowing their
concerns and understanding the reasons for choosing one service provider over another will
greatly benefit you by enabling you to increase your odds for getting new business.

Understanding the concerns and needs of service buyers will lead to your gains as a service
provider. If you are able to provide enough people with services that they wish to have, then
you will always be in demand.

Outsourcing - A Strategic Decision?

Does strategic outsourcing actually benefit an organization? Or will it backfire in the long
run? Here's how outsourcing has impacted organizations in India, and how it can benefit
you. by Soutiman Das Gupta

What do companies like Hero Honda Motors, Bharti Tele-Ventures Limited, the National
Stock Exchange (NSE), HDFC Bank, Sony Entertainment Television, Hyatt Services India
Pvt. Ltd, and HPCL have in common?

The common thread running through these large organizations is that all of them have
chosen outsourcing as a strategic business decision to garner tangible and intangible
benefits in the near and long run.

Indeed, it's difficult to find a successful and growing organization in India, irrespective of
size, that does not outsource a certain amount of its IT infrastructure services or
management.

Does it work?

Does it make sense for an organization to outsource its IT needs? Most of the CIOs and
analysts we spoke to felt that strategic outsourcing helps an organization to save on cost
and speed up delivery while focusing on core business needs.

To elaborate on the benefits, let's look at Infrastructure Strategies (IS 2004), the CIO
annual survey conducted by Network Magazine to analyze technology investment patterns
in the Indian enterprise. The survey, conducted amongst India's top corporates, shows that
nearly 54 per cent of the CIOs outsource “to reduce costs”.

A similar view is echoed by Michele Caminos, Vice President, Team Manager, IT Services,
Asia/Pacific, Gartner. “The most compelling reason why companies get into outsourcing
engagements is to save costs,” she agrees.

According to Infrastructure Strategies, other impor-tant drivers for strategic IT outsourcing

are focus on core competencies, access to special expertise, higher speed of delivery, and
access to new technologies.

Focus on the core

Given the pressures of a competitive market, organizations tend to focus on their core
activities — activities that link-up directly with the revenues and hence the profitability. In
such a scenario, companies tend to outsource their non-core tasks to focus on business
decision-making. And IT infrastructure easily lends itself to outsourcing.

Hero Honda Motors is a good example of an organization that uses strategic outsourcing to
focus on core competency. “We wanted to outsource all routine (IT maintenance) tasks so
that we could concentrate on the main business issues. With the headache of dealing with
routine complaints taken away, our staff focuses on user requirements and is able to deliver
services to users on time,” explains SR Balasubramanian, Vice President - Information
Systems, Hero Honda Motors Limited.

The IS 2004 survey reports that 46 per cent of the CIOs who outsource or have plans to do
so, consider “focus on core competencies” as the second most important reason to
outsource.

“There are definite cost savings in terms of resource management and less manpower costs.
As an IT team we can focus more on providing new infrastructure solutions to enable
various requirements of our core media business rather than get caught up with the daily
maintenance requirements of the existing set-up,” explains Aneeta Pankaj, Senior Manager,
Information Technology, Sony Entertainment Television (SET) India Private Limited.

Competitive business strategy

Outsourcing is best adopted after a careful look at business needs and available options. It
is essential that the outsourcing relationship provides strategic business benefits in the
future.

“Outsourcing provides a competitive strategy benefit in a number of ways to an

organization. It allows ease of management, reduction in cost, lesser manpower, and frees
up internal resources,” says Pankaj.

“Outsourcing can, and frequently does, provide both long- and short-term benefits to
companies that outsource, provided they have a strategic objective for outsourcing. Medium
and long-term gains are best realised by selecting a vendor who brings value to your core
business, rather than one who can provide you with the lowest prices,” explains Sharad
Sanghi, Managing Director & CEO, Netmagic Solution Pvt. Ltd.

Business-related

It's important to understand that outsourcing is a business-related decision and not simply
an IT need. The ultimate goal of outsourcing is to bring benefits to the business and
subsequently the customer.

Hero Honda's Balasubramanian says, “We believe an outsourcing service provider could
better handle our day-to-day management needs than our own team. We've not added
numbers to our staffing in spite of increased business activity. Since the outsourcing agency
manages the data centre round the clock, our staff has been relieved from working in
shifts.”

Bharti Tele-Ventures Limited has cut one of the largest outsourcing deals in Asia on the IT
infrastructure and network management areas. Dr Jai Menon, Joint President, Enterprise
Business, Bharti Tele-Ventures, says that the outsourcing relationship has brought,
“unparalleled value to the company for our customers, employees and shareholders.”

“For customers, it brings innovative and streamlined products and services like billing, CRM
and data warehousing. For employees, it brings enhanced performance-critical applications
like intranet, e-mail and online collaboration. And at an overall level, the strategic alliance
provides predictable IT spends, and additional revenue streams to further enhance
shareholder value,” he adds.

The changing landscape

In the past, Indian companies were not very keen to outsource their IT needs, primarily
because their enterprise IT environments were relatively less complex, easier to manage,
and inexpensive to maintain. Besides, few outsourcing service providers offered a number of
outsourcing options under one roof.

But now, IT environments in companies have become more complex. There has been
growth in terms of volume of business, range of services, number of employees, number of
competitors, nationwide locations, and enterprise applications. This calls for more attention
to IT as a service to provide strategic business benefits.

To help organizations get optimum value out IT and use it as a strategic tool to further the
cause of business, many CIOs think it worth their while to outsource IT infrastructure
management.

Innovative options

Indian enterprises today have a variety of outsourcing options from which they can choose
the right fit. Outsourcing solution providers offer services that include desktop client
management, server management, cable management, firewall management, patch
management, software license management, IT audits, backbone and connectivity, website
hosting, and IT infrastructure management.

Thus the available services are innovative, significantly more customised, and better aligned
with individual customer requirements. An enterprise can pick-and-chose specific services
and build a reliable mode of service delivery. A company can outsource basic desktop
management needs, or the management of the entire nationwide IT infrastructure if
needed.

To introduce more flexibility, many service providers offer clients hire-purchase schemes,
infrastructure on-demand, and pay-as-you-use options.

Hyatt Services India Pvt. Ltd has given a three-year contract to a service provider to
outsource network monitoring services. Says Harcharan Singh, the company's Director of
Information Systems, “The service provider has to upgrade and buy back the existing
hardware as per the depreciation cost agreed in the SLA. This clause protects us from
technology obsolescence, since technology changes rapidly.”

IndusInd bank has entered into an infrastructure-on-demand agreement with IBM India,
which includes building an IT infrastructure, implementing server consolidation, and setting
up disaster recovery systems. The partnership supports the bank's goal to become totally
customer-centric by providing more secure, responsive and efficient service, in line with its
renewed focus on retail banking. It allows the bank to scale up operations and pursue
aggressive growth plans.

Before you outsource

All things said, outsourcing is a strategic business decision that should be made only if a
company sees true business benefits accruing from it. Badly-planned outsourcing could
result in erosion of service value and cost escalation, but a well-planned outsourcing
decision can help you sleep better at night, knowing that the responsibility of deliverables is
in safe hands.

Michele Caminos of Gartner highlights a few steps that can lead you to take a proper
decision in this context.

 What type of a service is it? Identify characteristics of service and the respective
type.
 What perspective is driving the effort? Identify decision rights (service owner) and
input rights (other stakeholders).
 How are other perspectives affected? Identify conflicts and work them out. Check
'killer' factor. Improve solution.
 Check compliance with principles and fit with architecture.
 Who should carry it out? Evaluate different staffing possibilities. Select best from
combination.
 Who should participate in the decision? Submit service proposal to specific decision
process. Follow it up.

She recom-mends the following:

 Understand different business perspectives and how they affect sourcing decisions.
 Understand how perspectives must be harnessed to drive sourcing decisions.
 Develop a structured sequence of steps to sourcing decisions.
 Develop evolving governance architecture to support sourcing decisions.
 Develop internal sourcing decision roles.
OutSourcing...A Powerful Business
Strategy
Overview: Outsourcing is the assignment of one or more business processes to an external provider who then owns,
manages, and administers the selected processes based on defined and measurable performance metrics. It is
recognized as an ongoing strategy whereby a firm acquires a strategic partner. Traditionally, outsourcing was used
for narrow, low-risk processes, such as data entry, payroll and mailing. Today, it is successfully utilized for more
strategic business functions, such as financial management, customer service and human resource management. In
traditional outsourcing the result was not encouraging. The relationship often becomes a win/lose battle where the
client seeks to reduce to outsourcer’s profits, and the outsourcer seeks to maximize its profit structure in opposition
to the client but today, in outsourcing the emphasis is upon the win/win situation. The rate of change in business
today has increased the need for competent and comprehensive state & local tax solutions. Many strategic benefits
will be realized from outsourcing to OSG. These benefits has been discussed in brief in the article.