When does outsourcing make sense?

I had a very interesting chat today with Patrick Linton, one of the principals of Bolton Remote.  They have a real interesting model to help SMBs with their outsourcing and offshoring needs.

To be honest, it’s not an area that I’ve heard a lot of need from my clients.  Well, not exactly true;  They have lots of needs which could be well served through outsourcing, but are usually deeply scared to entertain such a thing.

Listen to the scary stories from large companies.  They invest huge stacks of money, incredible amounts of time, and take huge risks with their core business model.  A couple of years later, it’s not uncommon for them to be retracting from the whole venture.

Their managers are burned out.

Their customers are mad as hell.

Their quality has gone down the tubes.

Now, I’ve lived through this personally.  I’ve participated in and set up various kinds of relationships like this, and have even been on the receiving end.  I’ve coached executive teams who have had deep struggles in this area.

What I found out is that there’s not really anything deeply wrong about outsourcing.  Like any tool, if you use it where it makes sense, and use it judiciously, it can be wonderful.

Back when I was in junior high school, I took shop class like most boys that age.  Our teacher was missing one finger, and he used that as a lesson in respecting the awesome power of the bandsaw.  But one day I actually saw a kid in our class take off half his finger in a power planer.  That sobered me up fast.  No more kidding around.

If you’re going to take some core added value of your company and outsource it, you have to be thoughtful, attentive, and prepared.  When you do this, it can be a wonderful solution to a difficult problem.  But because we’re talking about subtle human behavior here, it’s not something you’ll get just by reading books.

Before I went to Australia, I spent two solid days in cross-cultural training.  That’s a LOT, but even so, it was just scratching the surface.

So it’s really neat to see a company that’s helping companies in the US and other countries to use this intelligently.  They set up and manage the employees in those other countries, and you get a team who’s dedicated to your business.  They just happen to be in a different country.

I’m going to be following these guys – clearly they’re doing something right, because they’ve been growing rapidly.