Should I be Outsourcing?

Abstract

When to Outsource?

Outsourcing is the strategic use of outside resources to perform activities traditionally handled by internal resources.

Outsourcing is a management strategy by which an organization elects to obtain critical "Support Functions" from a more cost effective and efficient specialized service provider. Simply put, outsourcing is the contracting of specialists to perform a particular task, activity or an ongoing function.

Core Functions

Your Core Functions are the activities and capabilities within your company that distinguish you from your competitors. If your business is the design and production of widgets, your core functions are those directly involved with widget design, development and production.

Support Functions

Support functions provide ancillary but critical support to core functions (e.g., Sales, Human Resources, Accounting, Training, Internal Auditing, Supplier Assessments, Legal Counsel).

To determine whether outsourcing may be an appropriate option for the performance of a particular task, activity or an ongoing function, ask yourself the following:

1. Is X (X being the task, activity or function in question) a "Core Function" of your business? If you answer yes, outsourcing the function is not an option. Core functions are, by definition, why you are in business. However, if you answered no, then "X" should be considered as a "Support Function" and a candidate for outsourcing.

2. If X is a candidate for outsourcing, is X critical to the success of your business? If you answer no, then you should consider eliminating the task, activity or function altogether. If you answered yes, the goal should be to accomplish the task, activity or function in the most effective and efficient means available.

3. Identify possible service providers of the Support Function (task, activity or function). Carefully analyze all service providers, both internal and external to your company, to determine which option offers the best return on investment.

Note: Service providers are, by the very nature of their "Core Functions", experts in delivering optimum value to an activity at the lowest possible cost - Capabilities that distinguish them from their competitors and keep them in business.

Outsourcing as a viable alternative to investing capital in non-core functions

Improving Company Focus

Outsourcing lets a company focus on its Core Functions by having critical Support Functions performed by an outside specialists.

As an ISO 9001:2000 Registered Quality Management System Consulting and Training Firm our "Core Functions" are those listed on our "Scope of Registration":

• Business Process Design and Development
• ISO 9001:2000, ISO/TS 16949, AS 9100 and TL 9000 Quality Management System Consulting and Training Services
• Procedures Documentation and Process Mapping
• System Implementation Guidance and Support
• Internal Auditing and Supplier Assessments
• Calibration Laboratory Assessments (ISO 17025)
• Lead Internal Auditor and Audit Team Member Training

We outsource the following Support Functions to Sequent, Inc. (www.sequenthr.com):

• Payroll and Tax Management
• Employee Benefits & Administration
• Employment & Labor Law Compliance
• Workers Compensation and Risk Management
• Safety Programs

We outsource our Accounting Support Function to Rammohan and Associates, Inc. (www.rammohanandassociates.com):

• Accounting Services

Conclusion:

Outsourcing support functions allows us to focus resources on continual improvement of our core functions - A necessity in today's business environment of doing more with less.

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ISO 9001:2000 Registered

Certificate No. FS36957

Quality Management Systems

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