IT Outsourcing Services

February 15, 2020 by No Comments

When small business owners consider outsourcing, one of their first questions is “What is the outsourcing cost?” I think they recognize how smart outsourcing is, but if their business is barely making a profit, they worry that it would be spending money needlessly.

I love to answer this question. When people begin to understand the true cost of outsourcing (and the cost of not outsourcing), they light up.

To understand outsourcing cost, you must first understand the difference between cost and price.

Price is the dollar amount of money you pay. Cost, however, is different. It is the total value of the time, money and resources associated with acquiring the object. The cost is best understood in a cost benefit analysis, which weighs the benefits of acquiring an object or service against the cost of it. I think of it as the value of the product or service.

For example, the price of a cup of coffee is about $3.00. The cost to you is different. You have to weigh the gas to get to the cafe, the time, the pleasure you take in the cup, the health benefits or risks, its impact on your productivity… The cost of a cup of coffee may be more or less than $3.

The price of outsourcing is hard to estimate without knowing the specifics of what and how you want to outsource. I can tell you that you will find outsourcers who will work for as little as $2/hr up to professional wages of $75/hr and higher.

Key Factors in the Price of Outsourcing:

  • What jobs you outsource
  • Whether you hire an individual or a team
  • Whether you use an outsourcing service or hire directly
  • The skill level of the outsourcer
  • The location of the outsourcer
  • Whether the outsourcer is hired per job or full time.

But the price is small piece of the puzzle.The cost of outsourcing is more relevant. If you want to know if you can afford outsourcing, you must look at its value to you and your company.

Key Factors in Outsourcing Cost:

  • Business acceleration: By outsourcing, your business growth will accelerate quickly. With faster progress, profits will increase. Business acceleration is one of the main benefits of outsourcing and should not be underestimated.
  • Lower stress: When you don’t have to do everything yourself, your stress level will decrease. Working when you are happy and at ease will increase your productivity, make your days more pleasant and please your family and friends.
  • Your time is available for money activities: By outsourcing the little minutia that every business has, your time is freed to do activities that bring in real money. Focus your time and talents on profitable activities.
  • Your time is spent on your core genius activities: Your core genius are the things you do so well and so easily that they don’t even seem like work. One of my top recommendations when planning your outsourcing is to find people whose core genius matches the work you need done. This frees you to do your core genius. You end up with a business built on everyone’s best talents.
  • Tax benefits: To offset the price of outsourcing, you may find that there are tax benefits. Consult your accountant to find out about this.

When you consider the true outsourcing cost, you will find it is very different than the price. In fact, it costs you money when you don’t outsource! The advantages of IT outsourcing services bring huge value with every dollar spent.