The terms outsourcing and consulting are generally used inthttps://www.backofficepro.com/erchangeably. There are, however, some salient differences that will be explored in the following article. Along with these differences are some guidelines for the small business owner as to how to get the best service from both a consultant or outsourced professional.
The Distinction Between Outsourcing and Consulting
Generally, a business consultant provides advice and information on how to do something for the business. They are paid for some specific advice or to overcome a particular business issue. Once the consultant has done their research and investigation, they would offer up this advice as a set process to be implemented to improve a business function.
Outsourcing, on the other hand, strictly refers to hiring a professional to actually complete a specific business function for the business.
For example, the transportation function could be outsourced to a specific firm, while the strategic planning process could be guided by a consultant. The primary difference being that the former would actually do the job, while the latter only provides advice and suggestions as to how the business can be improved.
Consulting and outsourcing is a growing trend, and it is worth knowing both what the differences are but also when to use the two. Regardless of who you choose for your business, you will need to engage with the process fully to make it beneficial. Below are five tips for businesses dealing with either an outsourced firm or a consultant:
Honesty
Provide the right information. For both a consultant and an outsourced professional, you will need to provide them with a full report in relation to their role. Do not hide issues that you, as the small business, may be embarrassed by. The reason you are spending the money is to get genuine advice or for them to run a business function in direct support of the business. In order for this to happen, they need to be fully versed in the business and any issues that may exist. Be honest about your business failings and shortcomings; it will help.
Clarity
There must be clarity for both parties. The consultant or outsourced firm and the business involved must be absolutely clear as to why the firm has been hired and what the aim is to be achieved. Both parties must be clear and know what they are signing up for. Never bring someone into the business on a whim without a detailed contract.
Involvement in the Process
Regardless of whether it is a consultancy or an outsourced firm, as a business owner, you must ensure that you and your team are involved in the process as much as is possible. The advice is to keep involved in the process, just as you would manage your health in conjunction with your primary health care advisor or GP, this must be a shared process. The gathering of information, its processing and analysis in relation to your business issues, must be something that you are both aware of and involved in.
The real entrepreneur needs to keep involved as much as possible in all research, as well as the strategic planning that results from gathering and collating business data.
Ownership of the Process
The business has decided to bring someone in for advice or to run a specific process. Own the process as it relates to the business, as it is actually your process. The consulting or outsourcing process must be seen as something good for the business and thus owned by the business.
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Implementation
Both a consultant and an outsourced firm will make recommendations when they have completed the work. Any recommendations must be implemented to the hilt. There is no point having spent the money if you don’t implement the recommendations.
Where to Start
The idea would be to start with a consultant and progress to an outsourced firm where they have suggested you have major issues. Supply Velocity would be an excellent example of a consultancy, offering advice and solutions for entire business processes, from supply chain to sales. Based on such advice, your business would then determine with the consultant whether outsourcing any functions would be beneficial for the business.
Consulting is about having the experts involved in designing business-relevant and specific solutions for a myriad of problems. While outsourcing is then allowing an external firm to run or drive one of these entire business functions, such as transport and logistics. This is the key difference that you must be aware of, but dealing with either will require the five tips above.
Using either a consultant or an outsourced firm are both proactive processes of engagement. Make sure you know what to expect from the outset.
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