When expanding business operations, you often have two options for meeting increased demands. One to outsource some of the work you are doing, while the other is to automate it. But what if you can take advantage of both methods at the same time? Let’s explore how you can combine outsourcing and automation in a more effective strategy for boosting your business.
Outsourcing and automation: the comparison
When deciding between outsourcing and automation, you will hear a lot of people championing each one’s merit. As such, it’s a good idea to know what each method can provide you. This will help you better craft a strategy for combining the two.
What outsourcing can offer
One of the biggest benefits of outsourcing some of your business processes is that it can cost less. While both these methods offer lowered costs than in-house processes, outsourcing goes better since you don’t have to spend on the infrastructure. All of this is taken care of by the outsourcing company that you are contracting with.
Flexibility is another major benefit that you can get from opting to outsource. You can quickly scale your operations by simply requesting more personnel from the outsourcing company. Since these additional workers are already trained, they can quickly jump into the work at hand.
However, a significant disadvantage of outsourcing is that you don’t have complete control of the process. Often, you only receive results at certain points of the work. As such, you don’t get to see how evverything has been handled. This creates a risk for you as you don’t know the quality of the work done until later.
There might also be hidden costs that you will encounter. These often come due to the company underestimating the amount of work that has to be done. As such, you might end up shelling out more money than what was initially intended. Additionally, any delay in the delivery of the outsourcing company’s work means another layer of costs that you have to take into account.
What automation can offer
The biggest draw of business process automation is the speed that it brings into the workflow. Even with a large fleet of workers, it can still take some time to take in and process certain tasks. With automation, you can go much faster than this. Furthermore, automation works round the clock. This lets you continue your operations even beyond regular business hours and serve more customers.
Another benefit of using automation is that it can give you a more consistent set of results. Automated processes will do the same task over and over again without deviating from your preset conditions. This is vital if you are handling repetitive tasks en masse and requires a high amount of reliability.
But automating a business process can be costlier initially. Off the shelf, automation software is fairly expensive already. But if you need a custom-made software for a specific business process, the development cost can go even higher. This is often the main reason why many small businesses are reluctant to use the method.
Another challenge when using automation is that it can have a limited amount of flexibility. Automation software will only be able to do a specific set of tasks. If you want to extend its capabilities, you will need to upgrade the tool. Or you will have to replace it with a new one. All of this can slow down the scaling up of business since you have to do a new implementation process.
Choosing between outsourcing and automation
With all the things you know about outsourcing and automation, it can be hard to decide which route to go. But you can still take advantage of both at the same time. The trick here is deciding which business process to outsource and which ones to use automation on. Here are some of the factors to consider when sorting out your business processes.
Nature of the task
The kind of tasks that you are dealing with will be the biggest determining factor in the option you choose. Look into each task and how they are conducted. Tasks that tend to be repetitive are the ones most commonly automated as they can be handled faster by machines. This includes such tasks as form submissions and certain lead generation activities.
On the other hand, tasks that require a careful amount of analysis are better outsourced since they would benefit from human intelligence. Content creation and search engine optimization are two such tasks. By tapping into human intellect, you create output that will be better received by customers.
Cost
As noted earlier, the cost of outsourcing and automation can vary greatly. Here, you would want to consider the budget you have for each task and weigh it against each method. For instance, ask yourself whether paying a team of agents would better fit the budget than purchasing specific software.
Consider the future costs that each method will likely incur as well. As you expand your business, you will likely need more personnel for your outsourced team. Meanwhile, your software might need to be overhauled or replaced to meet demands. When weighing these, consider how often you will likely implement such changes. This projection will give you an idea of the costs you can expect for each.
Customer impact
Another useful strategy on deciding on whether to outsource or automate a task is the impact that it will make on the customer experience. For instance, would most of your customers prefer to engage with a human agent or a chatbot for support? By selecting the right option, you make the experience better for them and encourage them to use your services more often.
A seful strategy here is to organize everything into internal and external processes.
- Internal: These are the processes that do not come into contact with customers, like payroll management and employee time tracking. They should be automated.
- External: The processes that customers come into contact with, like customer support and product inquiries. These should be handled more by outsourced human agents. Automation should only be used discreetly.
Note that there will be certain overlaps here. In such cases, you need to consider which method will be able to deliver a more desirable impact on the task at hand.
Using outsourcing and automation in the right order
Once you have decided on which tasks to automate and which ones to outsource, you need to combine both processes into a more effective strategy. At this point, you will likely ask which one to implement first.
Here, the systems strategy blog Love & Spreadsheets suggests that you automate first. By automating parts of your business processes from the start, you create a more streamlined workflow early. This gives your employees a more efficient environment that leads to a more effective expansion later.
Outsourcing then comes next as part of your larger expansion plan. The blog says that a good indicator for the right time to outsource is when the work you send out is already worth the money that you are willing to spend. This way, you will know that your investment would bring a good return to the business.
Combine outsourcing and automation into a potent strategy
Using outsourcing and automation together will give you a better direction in your business expansion journey. But you need to remember that it would be a balancing act. Follow the strategies that we have provided and you can lay the groundwork for more sustainable business growth.