Do you ever rely on a colleague to remember how to logon to a website or complete some convoluted form? Instead of remembering phone numbers do you store every one you’ll ever need (plus a few more besides) in your mobile phone?
Maybe, like me, your spouse remembers family birthdays and sends the cards while you remember to pay the bills?
The psychologist Daniel Wegner calls this transactive memory. I think of it as cognitive outsourcing; finding someone else to remember stuff so I don’t have to. We all do it and in a sense that means we’re all outsourcers. And it’s not just our memory we outsource as part of our daily lives.
I live in a house that someone else built. If I need any plumbing or electrics done I get someone in, because they are tasks that require specialist skills, experience and knowledge.
Even tasks I can do myself, such as painting and cleaning I prefer to outsource. While I could do it myself there are other things I’d like to send my spare time doing. Writing articles for instance.
At the risk of overstating my point I’ll provide one further personal analogy. I don’t farm animals or butcher the food I eat. Often I’ll also have someone else cook it as well. In fact the eating is the only thing I vehemently insist on performing myself.
Outsourcing is something we all do in one form or another. If you don’t have the skills, expertise or appetite to do something you find someone who does.
The fabric of our society is predicated on that principle. Outsourcing is just a form of collaboration and collectively humans learnt the benefit of cooperation a long time ago. Families, governments and the global economy are all based around humans collaborating, sharing tasks and having areas of expertise. It’s why our companies are organised into departments staffed by individuals trained and dedicated to performing that role.
I’m reminded of the old joke where a caveman comes across a dead brontosaurus laying on its back.
Another caveman is standing, proudly, on the dinosaur’s stomach.
‘Look what I killed’ boasts caveman 1.
‘How did you manage that?’ enquires caveman 2.
‘Killed it with my club’ he replies.
‘Must have been a big club’ scoffs caveman 2
‘Yes’ laughs caveman 1 ‘We have 200 members!’.
Not the world’s best joke but it does illustrate how working together we can achieve great things. I don’t wish to jump around in history too much but the Moon landing is often cited as man’s greatest achievement. At its peak the Apollo program employed 400,000 people in order to put 2 of them on the lunar surface. That’s the power of collective effort through collaboration.
In his book ‘The Selfish Gene’ Richard Dawkins argues that people are, at their core, selfish and primarily motivated by self-advancement; even to the detriment of others. If that’s true (and I’m not about to argue with someone as eminent as Richard Dawkins) it shows there has to be compelling advantages to collaboration in order to overcome our natural instincts. The fact that society exists is proof that working together and letting people focus on specialist skills is a concept that works.
Despite this the business world can still seem cautious of outsourcing. My daily working life involves consulting businesses on e-billing services. In that capacity I often hear variations of ‘we never outsource anything’, ‘It’s not company policy’, and ‘We wouldn’t want to outsource something as important as invoicing’.
I always find that an unusual attitude. If you print and envelope your invoices but don’t employ staff to push them through the letterboxes of your clients then you’re outsourcing. Using Royal Mail or ‘a.n.other’ postal service is by definition outsourcing; the delivery of the letter is contracted out to another party.
Of course, nobody really thinks of it like that, and nobody really objects to it. Which got me wondering what the real objection to outsourcing could be? As I’ve established, it’s something we all do on a personal level, society revolves around it and, perhaps most importantly, it works. Why then are some organisations so resistant?
The single biggest objection seems to be fear. Fear of losing control, fear of risk and maybe sometimes a fear of being automated out of work. As the old adage says, don’t let fear of what could happen make nothing happen. Fear aside, control, risk and automation are subjects worthy of exploration.
Early in my career as a salesman I was trained that every objection should be flipped and to become the very reason why you should do something. For example if someone says they are a small company you should respond by outlining how you specialise in helping small companies. If someone says they are a big company you tell them big companies are the ones that benefit the most from your product. And so on.
The technique is to turn the negative into a positive. I’m going to try that with the three objections to outsourcing; losing control, introducing risk, becoming replaced.
Loss of Control
Generally I think loss of control is a conflation with delegating the responsibility. The control still rests with the client and is even protected with Service Level Agreements and contractual obligations. The outsource provider can also be held accountable for negligence and poor performance.
The client is in control of setting the goals, requirements and performance indicators while the outsource entity is responsible for complying with them and proving as much.
By delegating the responsibility you’re allowing someone else to take care of the details. Outsourcing allows you to tap in to the knowledge, experience and capabilities most suited to successfully realise the task.
Risk comes from change so whether a company is looking to launch a new product, introduce a new process or refine an existing one there is a degree of risk. Outsourcing doesn’t create that risk, but it can be used to help mitigate it.
A good way to manage that risk is to understand the pinch points and pitfalls by utilising someone who has done it before and done it often. A professional who has acquired knowledge and skills through study and practice over the years, in a particular field or subject is commonly known as an expert. If I were to re-wire my house I run the risk of burning it down. I can reduce the chances of that happening by employing an expert in the form of a certified electrician.
I speak with a lot of credit teams and many fear e-billing and invoice automation will lead to a reduction in headcount. Similarly I speak with many IT Directors who feel it’s part of their job to provide technical solutions so fear outsourcing the task diminishes their value to the business.
In both scenarios the opposite is true. Freeing up internal resources that could be put to effective use for other purposes is a primary benefit of outsourcing. Last month I was with a business that has a best in breed, consumer focussed web product. The IT Director had rightly realised this situation was possible and sustainable if he kept his developers focussed on constantly building, refining and developing the product. That didn’t leave resource for building and maintaining back-office business processes such as invoice distribution.
By outsourcing this work to brand leaders in their field he was able to concentrate on remaining a brand leader in his.
For credit teams outsourcing invoice processing means delegating mundane time consuming processes to an external agency, allowing them to concentrate on the job they were hired to do; a job they were recruited for because of their skills and experience.
Directing your scope of work on what really matters inside your business, increasing work flow and automating laborious tasks creates an environment where staff are more valuable. Outsourcing can allow you to shine.
All that said there are clearly certain tasks and certain situations where outsourcing can’t or won’t work. As mentioned I do prefer to eat my own food and it’s probably essential to my survival that I do. I’m not advocating outsourcing is the correct de facto choice on every occasion, but I am suggesting it shouldn’t be immediately ruled out because ‘We never outsource anything’.
Outsourcing can and does work. In our personal life, in our society and in our businesses there are clear, compelling reasons why it can beneficial to entrust tasks to experts dedicated to completing them. If you don’t have the skills, time or appetite to do something, find someone who does.
As David Allen (no relation) once said; ‘You can do anything, but not everything.’