Outsourcing… Are We There Yet?

Dr Ross McKenzie The Startup Business Outsourcing

Well maybe its how we have been doing it

“To accomplish great things, we must not only act but also dream. Not only plan but also believe.” Anatole France

Are you a “fly by the seat of your pants” sort of person, or are you methodical to the point where you have a plan for everything, even for planning? There is nothing wrong with either of these choices, in fact, both can serve you very well. Because in business today, you do need to be agile and nimble to adapt to disruptive change. However, you also need to be strategic in the direction you want to be taking, otherwise you will not achieve your overall goals or mission.

That is why it is important, particularly in this age of disruption, when it comes to considering outsourcing for your business, to have a picture as to what your business looks like when pursuing these objectives. What does it look like today? How will your business evolve? What does it look like in the future?

Envision The Future is where you methodically design your business so that it is “fit for purpose” and in a way that allows you to set up, to scale, and to later sustain your business into the future.

You see, most businesses that get established are focused around the founder’s passion. Whether this be using the latest technology to solve community challenges – maybe like transport and Uber for example, or wanting to create lifestyle benefits, fulfilment, or independence from having a job.

While a lot of time is spent by founders in clarifying the type of business they want to be in, less time is invested in “designing the actual business”. Worse, when this is ignored altogether.

We believe designing your business is essential if you want to be successful in outsourcing. To do this, there are three things you need to cover off on, when you Envision The Future.

When you do all three well, you will be in a much better position to grow, while you also can respond to both internal and external needs.

In other words, you can still fly by the seat of your pants, but perhaps a little more restrained, So, what are these three things? Let’s check them out now…

Map & Business Blueprint

One of the things we have found over the years working with startups right through to some of the largest global corporations, was the need for the business to be able to fully define itself in terms of structure. Of course, the larger the entity, some form or organising framework was a necessity due to the need to assign resources and managing it in an orderly way. Hence the names like Frederick Winslow Taylor (1856-1915), Henry Ford (1863-1947), Peter Drucker (1909-2005) and others, are synonymous in this area.

However, the world as we know it today has changed and for startups, small to medium sized business (SMB’s), and small to medium sized enterprises (SME’s), we need to look at this in a different way because typically the boundaries between these organising frameworks that made sense in traditional business or larger companies, are no longer valid in the same way as they were before. Furthermore, the impact of technology, automation and robotics is changing the rules.

That is why we have created a map and business blueprint that is suitable for today’s businesses and we call this map The Five Imperatives Of Highly Successful BusinessesTM.

What The Five Imperatives Of Highly Successful BusinessesTM allow is for you to organise your business functions, processes and technologies around a set of principles. So, when you want to make decisions around investing in technology and automation, or areas of your business to outsource, you can do it in a way that is logical.

Once you start defining your business under these five imperatives, you can also start to align your needs to both internal and external demands. Even if you are just starting out as a business of just one person, “you”, this map will be the foundation that will enable you to build your legacy on.

Mix & Design Principles

The next thing you need to do is to define, or at least be cognisant of, the various decisions you need to make when it comes to outsourcing. We call these our mix and design principles, of which there are five.

Principle One: Sourcing Equity – Classic ‘Make versus Buy’

Principle Two: Location

Principle Three: Governance

Principle Four: Portfolio Demand Management

Principle Five: Partner Management

The level of focus you apply to each individual mix and design principle basically comes down to the size of your business. If you are a small startup, some will be less relevant than, say, if you are a large established business with multiple functional departments or divisions, as we defined in The Five Imperatives Of Highly Successful BusinessesTM.

Consider these mix and design principles like a “dial” that you turn up or turn down, dependent of your own specific needs.

Measures & Selection Criteria

Now that you have clarity on your MAP & Business Blueprint, formulated your MIX & Design Principles, the last thing you need to do when you Envision The Future is to be very clear as to what your MEASURES & Selection Criteria will be when it comes to finding an outsourcing partner.

For traditional outsourcing, or what we call “old world”, the criteria was relatively simple; however in this age of strategic outsourcing, or “new world”, there are additional factors to be considered.

To help you with this, we have defined ten criteria that you should use…

Capability, Capacity & Cost

Credible & Commercial

Collaborate, Consult & Controls

Culture & Community

The weightings of each will of course vary, depending on your priorities, however we do recommend you incorporate them all in some way.

As our Six Sigma colleagues always say:

“what gets measured gets done”

So we believe that if you adopt this approach as inputs into your future outsourcing decisions, then you will be more likely to be successful.

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