Outsourcing for SMEs

Outsourcing endeavors isn't only for huge multinational companies. In fact, small and medium enterprises (SMEs) outsource some of their business processes for exactly the same reason: rationalize costs and focus on core and strategic areas in their businesses. Through outsourcing ventures, SMEs can expect a smoother operation flow, an increase in production gains, a substantial return of investment.

Firms have been seeking the services of third-party providers  for security and maintenance for quite some time now, but today outsourced processes have grown to include operations, IT support, accounting and human resource functions. Outsourcing allows companies to delegate some of their non-core processes to other parties who can do these functions for them at a lower price, and who can deliver faster services and help keep track of their developments. 

Hiring employees always entails the company to dazzle applicants with incentives and benefits. In the outsourcing process, however, the company's main consideration should be the vendor's ability to satisfactorily perform the services tasked to them . SMEs must therefore be meticulous in their selection of the outsourcing vendor (How to Choose the Right Outsourcing Vendor). 

The outsourcing process is more or less the same for large companies and SMEs---the only difference is the size and extend of the outsourcing project. SMEs should take it one step at a time and see how far outsourcing can take them, which by the looks of SMEs already outsourcing their services, is a pretty encouraging distance.

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Ethical Concerns of Outsourcing

Outsourcing helps companies rationalize their costs and focus on the core processes of their business. However, before finalizing negotiations, acquaint yourself first with the possible risks (Risks of Outsourcing and How to Manage Them) and ethical issues and plan ahead for steps to take when they happen. Here are some ethical concerns in outsourcing processes.

• Security: The main security issue of outsourcing practices is confidentiality of information. Both client and vendor companies need to be meticulous about the set up of security systems and about the safety of storing electronic data. Ask your outsourcing provider about the measures they practice for information security, and if they give you a clear, comprehensive answer, take them as far as they can go with the decision-making process.

• Quality: This is where background research on your potential client vendor becomes important. There will always be that question of quality for services performed halfway across the globe; but if your partner knows what to do and has been doing this for quite a while, you might be less worried about how your expected tasks will turn out.  

• Environment: Thinking about how your business affects the environment is an integral part of your corporate social responsibility. Outsourcing your business processes then means also checking on your potential vendor if they practice sustainable operation methods and conducting periodic audits to make sure that they are complying consistently.

• Poor Work Environment at Vendor Location: Having a back office thousands of miles away can be daunting as you have minimal supervision on exactly what is going on. Choose an outsourcing vendor that imposes strict and reasonable policies on working conditions and who updates you on how your offshore employees are doing---are they comfortable? Are they motivated? 

Managing risks and smoothing out ethical kinks in outsourcing endeavors is an interactive process between client and vendor. Risks will materialize at some point, and ethical questions will rise; what is needed for a smooth-sailing partnership is a business model fostered on mutual trust and common goals.

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Outsourcing (and) Social Media

You might be wondering why and is enclosed in parentheses. This is because this post is about  1) outsourcing and social media as two distinct business tools independent of each other and 2) outsourcing social media. I know you're confused, but we'll work through the morphological niceties together.

If you run a small to a mid-size company and you want more exposure for your products and services, research in marketing strategies and other businesses will point to social media platforms as one of the most effective marketing tools out there. But what exactly is social media?

"A group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content."— Andreas Kaplan and Michael Haenlein 

Above is a rather technical definition, but let's focus on the "allow creation and exchange of user-generated content" part. In other words, while traditional marketing strategies set you apart from potential customers, social media allows you to actually get to know them and therefore tailor the presentation of your product/service according to what will most likely make them want it. Another keyword is exchange. Social media gives the market an avenue for discussion---where clients can ask questions, make clarifications, express grievances and companies can answer, analyze, and address. It is then very important for businesses to maintain activity on their social media pages or profiles.

Examples of the most popular social media sites out there are Facebook, Twitter, Tumblr, LinkedIn, YouTube, Google+, and Pinterest.

We have defined outsourcing in a previous post, so we know that it is contracting an inner business process to another company. Examples of services outsourced to outsourcing vendors are customer relations, data entry, human resources, content management, and other services that do not necessarily affect the businesses  core processes. As a business tool for cost-rationalization, outsourcing has proven itself to be so effective that it has evolved from a mere corporate strategy to a global corporate trend.

Outsourcing Social Media

Bringing outsourcing and social media together makes good sense because knowing how to properly utilize these tools together can dramatically do wonders for your business. Social media marketing is a non-critical part of your business processes (unless of course social media is your actual line of work) and can be done by experts who don't have to be at your office. Here are three reasons why you should outsource your social media.

1. It isn't really free.

Yeah, sure, you don't pay anything when you sign up, post pictures, or update your status. But for businesses like yours where time is money, maintaining social media pages can be an expense. An article by Forbes posits that the average midsize company spends at least 32 hours a month to properly maintain a single social media platform. And there is always opportunity cost, which means that the time you spend being on Facebook or Twitter could have been used doing work that is more critical to the company's operation. The ten likes you get on Facebook might cost you productivity gains. So while you might think you would rather not spend extra money to hire someone to be on Facebook or Twitter all the time, realize that you're already spending money by doing it yourself.

2. Focus on what you do best. Let experts do the rest.

Social media sites can be fairly addictive, and what you might intend as a two-hour visit to answer comments and post new updates can turn into half a day and by the end of your shift you'll realize that you haven't spent any time at all doing what you should really be doing. Sure, even nine-year-olds now can do a pretty good job keeping their Facebook pages active, but as a businessman who considers every part of his company important, do you really want to hire just anyone to take care of your social media responsibilities? My guess is not. The good news is there are experts in social media marketing, people who know what things to post, who to reach, and how to keep your social media platforms actively and consistently interesting.

3. Outsourcing = Less time and money

Experts on social media marketing will spend less time and do more than someone who is still trying to learn the ropes. Your chosen outsourcing vendor should know your goals and objectives and be able to incorporate that in their marketing strategies. Devote your social media platforms to someone who understands the nature of social media---fluid, dynamic, and encompassing. Finding the right outsourcing provider can mean less time, less money, and increased productivity gains for your company.

Finally, analyze how your investments can return to you for your social media campaigns before finalizing contracts. Your cost per acquisition for a lead through social media platforms must be complementary with your total expenses for outsourcing. 

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