In a modern, competitive business the question is not will you need to outsource or automate, but when and how you will make this change work for you.
I’ll be honest with you, every company in the world is grappling with what to do in the face of outsourcing and automation these days. Companies large and small are experimenting with what to automate or outsource, and when to hire locally.
Even trailblazing companies like Tesla have yet to find the right balance. So how can a small or medium business know what changes to make? The secret lies in knowing your industry and customer base.
Customers want to have their cake, eat it and more!
Let’s start by talking about customers before we talk about automation. Customers are what drive the need for automation and outsourcing. Lower prices and/or better products and services are what the typical client requires to engage your business. However, there are other key factors that clients consider these days including:
- The way products are made
- If businesses are ethical in their practices
- If businesses use environmentally safe options wherever possible
On top of that, individual customers also expect prompt services and products delivered quickly to their location. For businesses in Australia, understanding how to balance everything with the need for efficiency is crucial.
When should I outsource?
There are three routes to take when outsourcing; you can keep everything local, outsource specific functions to an overseas team while still employing Australian staff, or you can outsource your main operations entirely.
Similarly there are three elements that people use during a purchase decision; they need to know, like and trust your business. Successful organisations consistently generate high levels of all three, and that is why they convince so many customers to buy from them.
If you can maintain or increase know-like-trust, then outsource.
Establishing trust is the most challenging thing when you start your outsourcing journey. The media reports on horror stories about outsourcing failures and this can be a critical issue when you scale your business. Outsourcing client functions tends to decrease all 3 Know-Like-Trust factors. However, if you transition into outsourcing slowly or in smaller capacities at the outset, then you can lower the impact of these issues.
Another risk is that you will forfeit a significant amount of agility and control over your business when you outsource. If the outsourcers have issues with production or service, you may experience delays over which you have no control. It can also take time to discover a lot of these underlying issues. You save money by outsourcing everything, but you can also lose a lot. This loss factor is why many large companies have moved their call centres back to Australia after disappointing experiments with outsourcing.
When should I automate?
Although you will save a lot of money over time by opting for full automation for your business, this is a choice very few companies will ever make. While one reason to hold back on full automation may be the way people react to redundancies, the key to the matter is just that full automation is not that effective. An excellent example of this is Tesla, a factory built around full automation but continually struggling with output due to a lack of efficiency.
Let’s face it; we don’t all have Elon Musk’s profile or money to help mask output issues arising from large-scale automation. The reality is that robotic production methods and AI have not yet reached the level of consistency needed for dependable business requirements. They are also incapable of making rational commercial decisions. The human factor remains crucial at every stage of production to achieve the best outcomes — so don’t start ordering hundreds of machines just yet.
What works in Australia?
Australian consumers are well-educated and worldly, keeping up with modern trends and available services through the Internet and word-of-mouth. This strong knowledge base means that Australians will make immediate impressions of any product, service, or organisation quite quickly. Outsourcing and automation will impact their view of things, which means if you get it wrong you have a lot to lose.
What should you do?
Experiment and be on the lookout for opportunities. Leverage the benefits of all alternatives, and see what helps you and your brand image. If you have repetitive processes, then automate them. Automating repetitive processes is the best way to utilise automation at its current scale. These tasks are the things machines can do reliably, and it also frees up staff from unrewarding, lower paid jobs so they can focus on customer service aspects instead.
For repetitive processes that also need some level of decision making, then outsourcing can provide a cost-effective alternative that gives the flexibility that a robot could never deliver.
Always monitor, check, test and have in place a robust, comprehensive set of performance metric indicators. This allows you to better track conditions and other aspects of employment, to ensure your customers do not have an adverse reaction to your new implementations.
By using a mix of local expertise, outsourcing and automation, you can balance costs and efficiency with maintaining control and flexibility, as well as overall brand image and reputation.
That’s it, the secret to making outsourcing and automation work for you – start small and keep a balance between efficiency and quality. You can and will have the best of both worlds if you work with this advice.