Eleonora Israele via My Corporation
From starting small to protecting IP, here's what virtual employers can teach small businesses.
Being an entrepreneur can be an incredible adventure as you trek down a path that few have traveled promoting an innovative service or product. However, while your ideas may be fresh and unique, the entire process doesn’t have to be. Many businesses have and are outsourcing jobs to grow their businesses on a virtual level. In fact, research by IBM found that 27% of companies outsource to cut costs, 36% are innovators and 37% are growth-seekers.
Regardless of your reasons for outsourcing, it’s not an easy task to narrow down the right professionals for your needs and manage them from an offsite location. Here are some valuable tips from a few of the most successful virtual employers who have been using this resource for many years.
1. Virtual Employees Offer a Larger Talent Pool
GE has been the world’s largest outsourcer and offshorer of IT and when GE Digital was launched in 2015, they built three offices around the world (in California, Paris, and Bengaluru, India). According to Jim Fowler, chief information officer of GE , “We are not as concerned with partners who give the lowest cost per unit as with partners who are embedded together with my teams and driving the outcome. We have changed our mindset on why we are outsourcing. It’s not for the lowest cost. I want better productivity and outcomes for the business.”
2. Invest in Accountability
Cisco Systems has embraced offshore outsourcing since the early 2000s to expand its engineering/product development and IT capabilities. Like any company that sends work out, it can be a calculated risk to trust another company with such valuable information. This caused Cisco to form a governance team to ensure that the projects were being addressed to their expectations.
While it’s probably not feasible to hire your own governance team, here are some guidelines that Watson Murthy, a senior manager who has been involved with research and development for Cisco, explained concerning categories that are managed by their governance team. These include partner selection, contract negotiation, partner relationship management, overall finance management including PO and invoice management, equipment purchase, and more.
3. Protect Your IP
Many tech companies outsource their projects and countless startups have used freelancers and offshore employees to launch their companies (including Slack, AppSumo, and UpWork). “Solix, the leading provider of enterprise data management solutions, decided to take the similar path as well,” explains IT solutions company Grossum. “The main rule in outsourcing: do not outsource your core business. Everything else is up for discussion.”
4. Start Small
The Ford Motor Company originally sent just their back-office work (such as accounting) to India. After a trial period and great results, they trusted the overseas firm with more responsibilities. “As Ford Motor Company was pleased with the high level of quality and reliable services in India, it also set up a software development center to manage its e-commerce solutions,” states Nancy Pais of outsourcing company 31West. “One of the directors at Ford stated that Ford was extremely pleased with the fast and efficient services handled by Indian professionals.”
5. Focus on What You’re Great At, Outsource What You’re Not
Basecamp is a web-project development tool that helps companies handle project development more efficiently. However, in the beginning, they were unorganized and weren’t able to project the polished image they wanted to their customers. “To move development of the app further, Jason [Fried founder and CEO of Basecamp] and his teammates outsourced it to remote developers to optimize their cost-opportunity gain,” describes Matteo Duò of web development company Codeable. “Thanks to implementing outsource development into their product development strategy, they quickly started seeing Basecamp generated more revenue than their current consulting work and opted to focus exclusively on working on it as their core business. Today Basecamp employs 50 people around 32 countries worldwide.”
Starting and running a business is incredibly challenging, so it’s helpful to learn from those who have failed and succeeded before us. Knowing what tools to use and how to use them can also make all the difference in the world. Is it time for you to consider outsourcing some of your projects?
Eleonora Israele is a Business Manager at Clutch responsible for business process outsourcing and voice services. Clutch is a Washington, DC–based research, ratings and reviews platform for B2B services and software. Connect with Eleonora on LinkedIn and Twitter.
This article originally appeared on My Corporation.
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