Now I have to be blunt, this is not a “starter article” on outsourcing. If you haven’t outsourced anything before you should probably start somwehere else.
So I assume that you have some kind of outsourcing experience.
In this article I will give you three advanced strategies for managing your outsourcing process. You can also yink of this as a basic outsourcing management framework.
When you start out with outsoucing you typically have some kind of project management system to track your projects or tasks. Perhaps you have also just used email for commicating with your staff. While email is a great tool for communication it can quickly become very hard to manage projects and tasks over time.
So a first quick tip could be to setup some kind of project management tool. Whether that is something like Basecamp that is hosted and is super simple to use, or something you install on your hosting account like PHPProjekt that can be installed with a one click installer on most hosting accounts doesn’t really matter too much.
The main idea here is that the projects and tasks is out of your email inbox and inside a system where you can see the history and match tasks with people who can do them.
But before we dive into the advanced outsourcing strategies we need to discuss why we’re outsourcing in the first place. Bare with me here, there will be a point later.
Why is it that a small business would want to utilize outsourcing? Well depending on the size of the business that can be long list, but remember that we’re only talking about either start-ups or small businesses.
I’ve defined three main categories
- Save Time – You want to be able to use your own internal time for something more constructive.
- Save Money – You want to have something done in a country where it can be performed cheaper than in your own country.
- External Expertise – You want to buy some expertise that you don’t currently have in your own business.
The last one can be tricky since it’s notoriously hard to outsource tasks you do not know how to do yourself. As an example how would you instruct someone to do a task you did not know how to do yourself? And if that succeeded how would you be able to check the delivered quality if you did not know about the process?
But the first two, save money and save time are fairly self-explanatory.
Now the reason why I wanted to mention these objectives for outsourcing is that this is often where things go wrong.
Instead of doing a certain tasks yourself, you end up spending the same amount of time describing the tasks and managing the person/team that you’ve outsourced to. And then what have you saved? I’ve heard a lot of frustrated business owners saying that it would have been quicker to simply do the taks themselves.
You can also fall into the trap where the project or task will actually take more time to do for someone on the other side of the planet than for a person in your own country. This will therefore equal out the difference in price.
Specially in the IT business where I’ve spend a lot of time there is some kind of management belief in that you can just replace a developer in your own country with one from India and cut 70% of the cost. Problem is that the people making these decisions are management people with calculators and spreadsheets, not developers themselves and they very often fall into the trap of “not knowing what they’re outsourcing”. Sorry… just a quick rant, but in my experience, 4 out of 5 IT projects outsourcing ends up being a really bad experience.
So what are some of the comon pitfalls that you can experience as a small business owner wanting to utilize outsourcing successfully.
- Micromanagement – You end up sending mails all day long and being on endless Skype calls even with just a couple of people. This results in you not having any time to focus on what you really should be focusing on, developing your business.
- Error Rate – Everything seems to come back incomplete or simply half done. You spend all your time doing quality assurance checks and emailing back and forward everytime to find yet another thing missing from the delivery.
- Scaling – You can have found a great setup where everything seem to work. This is typically something that has been built over a longer period after a lot of trial and error. But now you are having trouble scaling this business because it involves you to train new people and let them know about your business.
Well I’m glad that you made it this far, because these issues are the ones that my strategies in this article are addressing.
So let’s take a look at the first advanced strategy.
The most important take away from process automation is to start thinking in processes instead of tasks and projects. There are of course always one-off tasks but if you have people hire part time or full time and not just for a single project, then you should start thinking in processes.
Defining a process has the benefits that it’s
- Visible to everybody
- Optimizes quality in the delivered work as it is done the same way each time
- Easy to get new employees up to speed
- Can be tweaked and optimized over time as you get feedback from the use
So how can you create a work processes? Well there are a number of ways. Below are some of the different examples that I have used in the past.
- Checklists are probably the most simple thing to create. As someone does a task they have to follow this list. This most likely be done in a single page of text (formatted as a list)
- Step by step process is a bit more elaborate than a simple checklist. Here you typically describe each step of the process in details. This could span several pages and include images such as screenshots where appropriate.
- Screencast where you record your own screen while you are performing the given task. I use Screenflow because I’m on a mac but if you are on a pc you might want to look into Camtasia (although a little on the expensive side). Screencasts are also really great if you want to show a specific thing outside the process such as an error or similar. I use it all the time.
- Weekly schedules is another great thing you can do. I had one guy doing some search engine optimization working for me and he basically had some tasks that should be done each week. So I created a weekly schedule for him with entries each pointing to a step by step process description. One example was that in the beginning of each week he had to send this week’s keywords to an article writer, so there were process descriptions on how he got the keywords and how/who/when he should send them to the writer.
But where should all these documents/videos be stored? There are different places. The easist thing I’ve found is simply to store them in a Dropbox account where you create a “Business Processes” folder and share it with your employees.
I have experimented with creating a real intranet for my company and putting all the processes here, but the problem is that then I need to maintain an intranet and while it might look snappy and sound awesome to have an intranet, it’s mostly just a hazzle.
Most of the time I just upload videos to Youtube and mark the video as unlisted. It’s really easy to do directly from my screencasting application so I don’t need to go to Youtube and upload myself.
This kind of automation is all about letting your employees think for themself. Yes I know they should be doing this already, but fact is most of the time they are simply doing what you are asking them.
But here we are talking about you empowering them to make their own decisions that might even cost you money. Now hold your horses, I’m not asking you to give them your credit card or anything. But one decision could be one that would take some time implementing for the employee and that would then cost you the time he or she spent doing it.
So there are two kinds of decision types that you can empower your employees with:
The whole idea about decision automation is that you set up some rules or limits that your employees can act within. We can describe the two different types of limits like this:
- Money limits – I did tell you not to give them your credit card, right? One example however could be the one that Tim Ferriss mentions in The 4-Hour Workweek where he says that his support team can make decision costing him up to $100 (later raised). So when a customer calls the support team and says that he hasn’t received a package, they can just send him a new one without involving Tim. I’m not in the physical product business, so I haven’t had to give these kinds of instructions, but you might need to.
- Time limits – If your employee experiences trouble, how long time can they spend on solving the problem before they need to notify or alert you? This could be setting a timespan on a given tasks like “you can spend 10-30 hours on this but alert me after 20 hours if you can see that you will need more than 30 hours” or simply tell your employee that they can spend up to X hours fixing problems or unforseen issues in regard to their job before alerting you. But if you do so, make sure that you can trust your employees, this is not a rule I would start out with without knowing my people really well.
So now you have your outsourced team running on tracks, but how do you improve and evolve your business?
I guess that you are mostly the person doing any business development in your company, right? But why not have a formal way of getting input from your outsourced team as well?
There are two main categories that I want to mention
- Process Improvements, and
- Business Ideas
The most obvious candidate for improvement is of course the processes that you’ve created. They are using them everyday so if something is unclear or difficult to follow, or if something could be done much easier, your guys (and gals :)) are the ones who can provide you input on it.
The second candidate for improvement is your business itself. It could be that a person on your team had an idea on how you could easily improve a product or perhaps bring it to a new market. So why not listen and better yet, have a formal strategy for how your team can contribute their own ides.
This last strategy can be quite hard to implment in practice. In some cultures employees are not used to saying or doing anything that lies outside the directions they have been given from their employer/boss. So I do not recommend doing this with a new team.
You need to create an atmosphere where you welcome new ideas and actively tell them that you do. Also if you create a “process” for contributing ideas or process improvements, you are also actively telling your team that it is expected of them.
Besides creating a process for improvements you should also always appriciate every idea you get. Even if you don’t end up implementing it or even liking it. If someone gets laughed or ridiculed at for bringing an idea to the table, they most likely won’t contribute with another idea. And it would be a damn shame if it was idea number two that would have doubled your business, right?
Summary and Stuff
So there you have it. If you are already doing some outsourcing and want to take the next step then you should consider implementing these strategies.
It’s not always easy, but once you get them running you will see that you will have much less management, higher quality and a happier team.
About the Author
Rasmus Lindgren is currently running a couple of lifestyle businesses that enable him work only a few months of the year. He spends the rest of the time with his family, writing a book, following crazy ass ideas and focusing on self-development.
You can find him over at his blog http://RetireMyAss.com