It's All About Focus

By: Jay Raman (As printed in the Asian Business Journal September 2006)

In today’s political environment, we often hear about outsourcing of positions and jobs in the workforce. We are often filled with images of large U.S. Corporation outsourcing to companies in India, China, or around the world, but the reality is that outsourcing does not require vendors in foreign countries. However, sometimes small and midsize business owners feel disconnected from this process, or they do not see how this process is a feasible technique in their lives. The truth is that small and midsize business owners may have just as much if not more benefit from this strategy.

In August 7, 2006, VISA and SCORE (a nonprofit group) released a study that stated that over 62% of sole proprietors (who represent over three fourths of small businesses in the United States) indicated that the main reason that they cannot focus on generating new business or being stretched too thin. Additionally, in this same survey, 52% of respondents stated that they would spend more time generating more revenue if they were given additional time.

The old saying, “Time is money”, reflects a truism which should guide small business owners as they make business decisions, but often this may not be a guiding rationale in their business. In the same study, 45% of sole proprietors stated that the reason for not hiring additional resources stem from lack of trust, time to train staff, and work-style. Why would you potentially sabotage your life dream to be a successful business owner, and not seek out resources to assist growing the business?

The Outsouring Institute conducted a study in 1998 which explains the top 4 benefits to outsourcing, and they were:

1. Reduce and control operating cost
2. Improve company focus
3. Gain access to world class capabilities
4. Free internal resources for other purposes

The same group also explained the top 10 ways to select a vendor, and they were:

1. Commitment to quality
2. Price
3. References/Reputation
4. Flexible contract terms
5. Scope of resources
6. Additional value-added capability
7. Cultural match
8. Existing relationship
9. Location
10. Other

Finally, this group listed the following 3 reasons why outsourcing relationships work and they include:

1. Understanding company goals and visions
2. Strategic vision and goals
3. Selecting the right vendor

Small and midsized business owners find it difficult to succeed; but why are more business owners not trying to focus towards winning more business? Outsourcing resources and focusing may provide you valuable time to build the business and achieve long term success. If you have questions about this article or the concepts that we are discussing, please do not hesitate to let me know.

Jay Raman
Managing Director
Ashoka Lion Consulting
info@ashokalion.com