How to Use Outsourcing to Focus on What Makes Your Distributorship Unique

February 2013, - WebXclusive

by Deborah Lockridge, Editor-in-Chief - Also by this author

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1. The process or function has been a longstanding weakness (or at least a pain in your rear)

2. The process or function is not something that is critical to a customer choosing you as a supplier.

He suggests a brainstorming meeting with employees to talk about what areas might be good to outsource.

"Think about where do you stink, what you just can't get it right. As long as it's not a core part of your business, that's a candidate for outsourcing."

Things to consider

"Just remember that outsourcing is a bit like getting married – it is much easier to get into some situations than to get out of them," Marks said.

He emphasized that it's important to choose the right partner for outsourcing. "Your potential outsourcing partner must have the same importance to you that you do to them or someone will get hurt." He suggests choosing a company around the same size as your own.

And start slow. "It is more important to learn how to do it right than to rush in solving all your large challenges," Marks said. "Find something that is a second-tier challenge and build a proof of concept around it. Move on to larger challenges as your skills and experience increase."

Keep in mind that it does require a front-end investment to manage an outsourcing arrangement properly. Be clear on what you're going to measure in order to assess the success of the project. Get your CFO, your attorney to look over the agreement.

"You need to be very specific about what you want, and there will be a cost to disengage," Marks said, suggesting a 90-day proof of concept with an easy exit option if things don't work out.

Overcommunicate the changes you're making to employees and customers, Marks said, including hotlines to deal with any problems that come up. And emphasize that you're not must making this change to cut costs. For instance, you might tell an employee, "You're my senior counter guy, you hold customer relationships in your hand, and I want you to focus on them instead of this other paperwork that's getting gin the way."


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