Evaluate outsourcing

You often need to outsource a task when you don’t have the inhouse expertise. The rule of thumb is to outsource anything that is not core business. For example, if you want to have a website, you’ll get someone else to host it; you probably won’t become an Internet Service Provider unles it’s part of your core business.

The gross cost of an outsourced provider is often less than doing it yourself, especially if you don’t have industry-specific experience. And it often doesn’t work to simply hire someone.

However, the rule of thumb is not an absolute. For example, if you are locked into using propriatary software for a highly specific purpose, you probably have no control over how it is developed and its software compatibilities.

Generally speaking, the problems with outsourcing are diminished ability to make decisions over your business position. Consider the following:

1. Outsourcing can compromise your supply chains. You might be in a strategically stronger position if you are your own supplier and it costs less that outsourcing.
2. Outsourcing can also be more expensive or give you less control over your costs.
3. If you outsource, you fail to develop inhouse expertise necessary to make strategic decisions and determine your own business processes.
4. You might be unsatisfied with the quality of the product, but can’t do anything about it.
5. It can be very difficult to change suppliers if you are locked in.
6. Your providers set your schedule. For example, the printer might tell you how long they will take with your new brochures, or run late.