IT and Business Insights for SMB Solution Providers

Outsourcing: It's Not Always a Dirty Word

In this economy, “survival mode” management means making cuts anywhere it makes sense to do so. Manufacturing isn’t the only thing that can be done out-of-house. By Andy Marken

With the economy still clamoring to recover, business owners are tasked with survival management. Survival management means weighing what company should be doing against what it can do. Moreover, it means deciding which tasks can be completed in-house, outsourced, scaled back, or eliminated.

‘Outsourcing': It's Not Always a Dirty Word

Looking Out-of-House
When it comes to survival management, business leaders must assess what they are doing internally versus what they should be doing internally. Then, they can determine what they should outsource.

Most of the time we think of outsourcing, we think of manufacturing overseas. Indeed, few manufacturers in the industry do much--or any at all--of their own production in-house. In fact, many of them are essentially technology developers and marketers. They buy cases from specialists. Boards and packaging are produced and stuffed by specialists. Even complete lines of components are purchased from specialists.

Many OEMs, like Dell, HP, and Cisco, never even take possession of some product. Instead, it's shipped directly from the manufacturing specialist to the channel partner or consumer.

There are some key benefits to the outsourced-manufacturing model just described. For one thing, management is able to adapt quickly to sudden industry or marketplace changes. Technology and manufacturing can be changed almost overnight--and the company doesn't have to be tied into the heavy machinery and equipment needing to be replaced. More importantly, outsourcing manufacturing means companies don't have to deal with the challenge of hiring, firing, training, and retraining personnel.

But manufacturing isn't the only thing a company can outsourced. SMBs need to look at all aspects of their business. When it comes to survival management, all options need to be on the table.

For that reason, many companies have been cutting their internal communications (advertising and PR, for example) instead of expanding them. They've been outsourcing these duties to specialists as a means of keeping things flexible.

ChannelPro SMB Magazine

Get an edge on the competition

With each issue packed full of powerful news, reviews, analysis, and advice targeting IT channel professionals, ChannelPro-SMB will help you cultivate your SMB customers and run your business more profitably.