Outsourcing

Outsourcing, Offshoring and Insourcing

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Many of the topics covered by this blog have experienced an avalanche of attention due the central focus of the U.S. presidential campaign. As a result, I thought I’d use this space to clear up some of the common misconceptions around the terms being bandied about on the campaign trail and in political attack ads.

In a recent campaign stump speech, President Obama blasted Mitt Romney for his campaign’s assertion that there is a difference between outsourcing and offshoring. I’m sorry to say it, but President Obama was misguided in his claim that the terms are synonymous.

Outsourcing vs. Offshoring

Outsourcing is defined as the practice of subcontracting goods or services to a third party. By definition, Outsourcing is an arrangement in which one company provides business services for another company that would otherwise be handled internally. While the terms are often used synonymously in the public lexicon, they are in fact very different. For example, a firm hiring a commercial cleaning company to provide janitorial services is essentially outsourcing their cleaning duties.

Offshoring generally refers to the practice of hiring a company in another country to perform such duties, although it can also describe a firm’s establishment of a wholly owned subsidiary overseas to carry out business functions. Businesses in “First World” countries often engage in offshore outsourcing to save money and improve efficiency.

What is Insourcing?

This is where it gets confusing. Insourcing is defined as the practice of farming out work to a business unit under the same ownership. Using this definition, a firm setting up a plant or manufacturing facility in China would be insourcing. To be fair, this is not how the term is commonly used. When President Obama refers to “insourcing”, he is describing the practice of bringing jobs previously outsourced to offshore providers back to the U.S.

Make sense?

Outsourcing Business Development

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Global Business DevelopmentBusinesses must efficiently allocate resources to survive in the competitive global marketplace. The majority of small businesses would like for an cost-effective method to prospect, promote, and sell products or services and appropriately cope with outbound sales problems. While telemarketing outsourcing has been put to use by businesses for a long time, many are now investigating doing the same with higher-level business development activities. The reason? Outsourced business development can be more cost-effective and efficient than wasting substantive time, assets, and elbow grease than hiring $50k representatives.

Still, once you have made the decision to outsource, it is up to you to make the project successful. If you aren’t careful, outsourcing business development can be detrimental to your sales process should you choose a second-rate provider. If you don’t provide sufficient training, maintain adequate communication, or impart enough management oversight, your effort of effectively passing the business development baton will fall flat. Offshore outbound sales efforts must have a workforce which can take on massive volumes of outbound calls and are prepared to work with your internal team.

So what constitutes a qualified representative? First, the agent must be an effective communicator who can effectively interact across departments regardless of discipline, background, and/or expertise. He or she should also have experience with, or sufficient exposure to, a wide variety of business disciplines. Furthermore, the representative should ideally be an excellent communicator, both verbally and in the written word, and have the ability to muster the passion and energy to take company sales to the next level. If your call center of choice employs agents of this skill set, your organization will be well on its way to improving results in complex business environments where projects, divisions, and departments cover various markets.

Outsourced business development reps primarily focus on understand the challenges of delivering a more cost-efficient and profitable process. Call center agents must be familiar with sales team communications and relationships, and be able to work across departmental boundaries. More specifically, the job calls for team players with business networking skills, not to mention the know how to engage both regional sales managers and field reps with constantly changing business initiatives. Outsourced representatives who demonstrate the ability to quickly absorb sales and marketing training typically succeed with driving field sales initiatives. Offshore business development reps will be responsible for developing and working with sales field operations to implement the tactical plans to drive new business. These activities will have a significant impact on the overall success of the company, as well as ensuring the commercial viability and ultimate success of sales products and solutions.

By selecting a qualified call center, outsourcing business development can release your enterprise from the time commitment and expenditure necessary to unload substantial payouts in terms of salary and bonuses associated with internal sales operations. This will allow you to continue operating your business effectively, and to target your unique skillsets on your innate proficiencies.

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