The role of an outsourced service provider by today’s standards

Who wouldn’t prefer a full time employee to an outsourced service provider? It’s time to stop beating around the bush and face reality, even if it’s not what we want to hear.

It’s a fact that outsourcing is cheaper and requires fewer headaches than a full time employee. It also helps for a best targeted spend Vs result. If money is not an issue though, with the cost of hiring full time is often 4 times that of a service provider – not to mention the recruitment agency fee – then outsourcing is not on the table even for discussion.

 

The realization process – Service Provider is not an option yet

It takes a significant amount of time to realize you’ve made bad decisions. When you start counting your spend Vs income, when you quantify how much you progressed with your team and where you stand in the industry as a market player, you finally start pondering on alternatives to your current structure.

 

The scenarios – Could a Service Provider be an option?

There are only two scenarios to consider; in the first one you know what you’re doing and you’ll probably spot the problems before they become “make or break” holes draining your bank accounts. Outsourcing is now an option…

In the second scenario, you don’t know what you’re doing, the bank accounts drained already and the costs associated with your current structure are no longer viable. You then begin looking for alternatives, you probably decide to downsize and take over parts of the business that once belonged to your very expensive head of department. To make things even worse, all decisions are now biased and you’re looking for the cheapest solution to your business needs. And what do you know..? Outsourcing is now an option…

 

The facts – Which Service Provider do i choose?

If you are a broker of more than a year in the business, I guarantee you can associate yourself with the second scenario, since most brokers raise share capital as well as enough operating capital to start their business. The capital is then spent in the first year of operations in the battle to position the brand for the desired market share.

In an ever increasing industry such as the consulting services industry, the possibilities are endless; countless agencies are popping up, ready to serve on a small budget, whispering all the right words, words that you need to hear. Words that provide the feeling of “salvation” since you brought yourself at the brink of closing shop.

 

Conclusion – The correct Service Provider, is the only option

The point is not to allow yourself to reach that point. Evaluate all options when the business is strong, well-capitalized and allows room for changes that can be adopted fast. All necessary considerations must be put on the table at an early stage and educated decisions to be taken always based on industry standards and correct competitor analysis.

Once there is a strong base and foundation set-up, be sure that you secured a few more years as an industry player and can reconsider your spend accordingly. An absolutely fantastic time to employ more employees and heads of departments. Not to set up your structure, but to strengthen it with their expertise and hard work.

Departments that are built around people are the most costly and least viable.

Departments that are built around industry standards, competitive analysis and decades of experience, will be with you fora long time.

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