Few topics get as much attention as outsourcing does. It's too bad that so much of that attention reflects a clear misunderstanding of how outsourcing can benefit everyone. In this case, I am not referring the 'off-shoring' (outsourcing to companies who employ people outside the US), though this post may certainly apply.
My VP, Brand Development, was recently at a meeting of fellow entrepreneurs. The question was asked, "How do I determine what functions I should do and what functions I should outsource?" The facilitator responded, "When people outsource, it is generally because they don’t know how to do something or because they have run out of time."
This may be the reason people outsourced years ago. It is, however, a very poor answer for what I am now calling Outsourcing 2.0. The answer misses the point completely. What concerns me is that this is a fair representation of how many small and mid-sized businesses look at outsourcing.
First, one of the main reasons outsourcing fails is because the outsourcer does not understand what is being outsourced. If you'd like The Top 7 Reasons Outsourcing Fails, send me an e-mail (firstname.lastname@example.org). Second, and, most importantly, the lack of time may be a contributor to the decision to outsource - it should never be a driver to outsource.
Saying that I am going to outsource a function because I don't have time, is like saying I am going to hire a new employee because I don't have time. Sure, time contributes, but if the primary reason I am hiring someone is because I am short on time, then I'll probably end up making a bad hire. A business should only hire someone when there is an important business result that can be attained or meaningfully improved upon, by a hire. The most effective hires are ones made to increase a company's capabilities.
Outsourcing should not be looked at any differently. Today, for fast growth businesses, the only real difference between an outsource and an employee is a tax designation. Functionally, there is no difference. In today's 'Talent Wars' t,hose companies that use talent best, in all its forms, have the greatest chance to win. It was Jack Welch who said, "Your back office is someone else's front office." This simply meant that the thing that is not your core competency is someone else's core competency.
For full disclosure, I offer outsourced solutions and work with several companies that do, as well. The reason my clients outsource their go-to-market strategies to Imagine is because they know that go-to-market is all we do and that we've built an infrastructure for going-to-market that they could not build. As a result, their company has more sales and marketing capability than if they did it on their own.
As you look for fast-growth, you should look at outsourcing in the same way.