Outsourcing tends to work best when it addresses a specific business need — not simply a desire to reduce overhead.
Before deciding what to outsource, take a look at how your team is actually working.
The objective is fairly simple:
Are your most capable — and often most expensive — people spending most of their time on the activities that create the greatest value?
Or are they being constrained by lower-value tasks, stretched too thin, or regularly doing work outside their skill set?
Do Any of These Sound Familiar?
Take a quick look around your business.
- Important deadlines are regularly missed.
- Customer or internal response times are slower than they should be.
- Opportunities are being lost because people simply don't have time to follow them up.
- Senior or specialist employees spend significant time on routine administrative work.
- Backlogs are growing or information isn't being kept up to date.
- Error rates, rework or inconsistencies are increasing.
- Staff regularly work overtime just to maintain normal operations.
- Employees are doing work well outside the roles or skills you hired them for.
- Managers regularly complain that they don't have enough time for their higher-value responsibilities.
- Team morale or employee retention appears to be deteriorating because people are overloaded.
One item on this list doesn't necessarily mean you should outsource anything.
Several of them, however, may suggest it is worth looking more closely at how work is allocated.
Watch for the Jobs People Acquired by Accident
Particularly in smaller organisations, new responsibilities don't always arrive with new resources. They simply get added to somebody's existing job.
Social media needs managing, so it lands with a marketing or business-development manager. That person may have excellent ideas about what the business should say but little expertise — or interest — in preparing content, managing platforms or working out when and how to post it.
A new reporting requirement appears and is handed to Finance because “it's reporting”. The accounting team may hold some of the information required, but that doesn't necessarily mean the new requirement sits naturally within their expertise.
Over time, capable people can accumulate a surprising collection of responsibilities simply because they were the closest available person when something new appeared.
When reviewing how your team spends its time, look for these inherited responsibilities as well as the activities contained in formal job descriptions.
As discussed in What Could You Outsource?, ownership and judgement do not necessarily have to sit in the same place as administration and execution.
A Quick Needs Assessment
You don't need a full-scale business review by a team of external consultants to identify potential opportunities.
For many businesses, a relatively simple exercise will tell you a great deal.
1. Map What Your Team Actually Does
Start by looking across the organisation, from senior management through to administrative and support roles, and list the significant recurring activities being performed.
You don't need enormous detail. You are trying to understand where time is being spent, how workloads are distributed and who is actually doing the work.
Department heads and supervisors can provide a useful overview of what their teams do, but don't rely solely on management's understanding or on formal job descriptions. Speak to some of the people actually doing the work.
Jobs evolve. People inherit responsibilities. Processes change. The work being performed today may look quite different from the position description written several years ago.
A few short conversations can be remarkably revealing.
2. Classify the Work
Once you understand what people are doing, broadly classify those activities.
A simple High / Medium / Low or A / B / C system is sufficient.
At one end are activities that depend on the person's expertise, relationships or judgement and contribute strongly to the organisation's objectives.
At the other are necessary supporting activities: data entry, scheduling, database maintenance, document preparation, routine checking, internal administration and similar work.
“Lower-value” does not mean “unimportant.”
Processing an invoice correctly may be essential. Maintaining accurate customer information may be essential. The question is whether those activities represent the best use of the particular person currently performing them.
3. Find the Time Sinks and Bottlenecks
Where are the backlogs? Where is excessive time being spent? Where does work regularly require rework? Which teams are overloaded?
Sometimes the answer will surprise you.
We have seen situations where apparently minor activities consumed far more time than management realised, where workloads were distributed unevenly, and where processes continued simply because “that's how we've always done it.”
What happens after a new system is implemented is a common example. The technology changes, but the underlying process doesn't. Instead, the old way of working is simply carried forward and overlaid on the new system.
Before outsourcing a task, ask:
Does this task still need to be done at all?
Sometimes the right answer is not to outsource it. It is to eliminate, simplify or automate it.
4. Work Out Where the Time Goes
Management estimates may be enough to identify the obvious opportunities.
If they aren't, ask employees to record how they spend their time for a short period. This doesn't need to become another permanent administrative process.
For many roles, a week or two of basic time recording will provide enough information.
“Customer enquiries”, “invoice processing”, “CRM updates” and “monthly reporting” are usually sufficient descriptions. You are trying to understand the work, not monitor every minute of somebody's day.
Look particularly for recurring activities consuming substantially more time than management expected.
5. Step Back and Choose the Right Solution
Once the exercise is complete, look for patterns across the business.
Are highly paid people repeatedly performing work that could be handled elsewhere? Are the same administrative burdens affecting several departments? Would changing how particular activities are performed release meaningful capacity?
Then work through the alternatives:
Can we eliminate it?
Can we simplify or automate it?
Can we reallocate it within our existing capacity?
Or should we outsource the capacity or function needed to achieve the desired outcome?
The answer may be different for different activities.
An inefficient or redundant process should be fixed or eliminated. Moving it offshore because it can be performed more cheaply doesn't make the process any more efficient — or any more necessary.
Automation may remove much of another task. Some work may simply be better allocated within the existing team.
Other activities may appropriately remain exactly where they are. They may depend heavily on local knowledge, relationships, professional judgement or close interaction with other parts of the business. Or the existing arrangement may simply be working well enough that changing it would create more disruption than benefit.
Where a genuine capability or capacity gap remains after considering those alternatives, outsourcing becomes one option for addressing it.
What About AI?
With all the discussion about artificial intelligence, there is an obvious question:
Why outsource the work if AI can do it instead?
Good question.
If AI can genuinely eliminate or automate a task, that may be the better answer. There is little point paying somebody — in Australia or offshore — to perform work that technology can do effectively.
But AI doesn't necessarily remove the need for people. Somebody still needs to determine how the tool should be used, provide the right instructions and information, check the output, deal with exceptions and, in many cases, build the process around it. The level of human involvement will vary considerably depending on the work and the technology.
That brings us back to the same question we have been asking throughout this series: who is the right person to do that work?
If a manager can use AI to complete in ten minutes something that previously took two hours, excellent. But if that manager is now spending significant time writing prompts, checking outputs, maintaining AI-assisted processes or performing the administrative work around them, it is still worth asking whether that is the best use of their time.
AI, automation and outsourcing are not necessarily competing choices. Technology may eliminate some work, change other work and make people more productive. The objective remains the same: understand what needs to be done, remove what doesn't, automate what makes sense, and use people where their time and judgement add the most value.
Look Beyond Salary
If additional resources are required, cost will naturally form part of the decision.
But comparing an Australian salary with an offshore salary tells only part of the story.
Employees bring other costs: recruitment and onboarding, benefits, workspace, equipment, software, HR administration and IT support. Every employee also creates some additional work simply because they are an employee.
There is also an opportunity cost.
If a senior employee spends eight hours each week performing routine work, the question isn't only what those eight hours cost.
It is:
What could that person accomplish if you gave them those eight hours back?
That may mean more time selling, serving customers, managing people, improving processes or pursuing opportunities that aren't currently getting enough attention.
At the same time, don't overestimate the indirect savings from outsourcing.
An offshore employee still requires training, direction, feedback and supervision. Your IT team may still need to provide and manage system access. Contractors require appropriate oversight. Even an outcome-based service provider needs a clear brief and an effectively managed commercial relationship.
Some responsibilities transfer to the outsourcing provider. Others remain with you.
Outsourcing also introduces a change that needs to be worthwhile. Moving a small amount of work that is already being performed efficiently may save something on paper while adding unnecessary complexity in practice.
The Objective Isn't to Outsource More
A useful assessment may identify several activities suitable for offshore support.
It might also identify a process that should be automated, work that should be reassigned internally, or a task that should simply stop.
It may confirm that some work is already being performed by the right people in the right place.
All of those are useful outcomes.
The objective isn't to outsource as much as possible. It is to make sure your people, processes and resources are being used where they create the greatest value.
Sometimes outsourcing will help achieve that. Sometimes it won't.
The important thing is to start with the business need, understand the work and choose the solution that makes sense.