Sourcing your challenges away…

Without a doubt companies are struggling to find ways to remain competitive in today’s economic climate. More and more you should be focusing on your core competencies. Taking your skills and applying the fundamentals of your industry will in many situations help you find your way through the dark forest of these economic times. As Executive professionals solidify their team that will lead the way to daylight, don’t be lured into the trap of stepping over $100 to get $10.

What do I mean? Sometimes when subjected to high levels of stress, it is easy to over react to a challenge and not take the time to think it through to its logical conclusion. The “panic” button gets pushed (quite inadvertently mind you) and what looks good today can cause troubles tomorrow. Cutting back on core employees and programs during times of limited cash flow, tighter credit, and decreased earnings can sometimes appear to be the safest path through the dark forest. But don’t be fooled! This can be a trap that locks your company into a downward spiral that is impossible to recover from. When the economy rights itself, and it will, you need to be in a position to succeed and thrive and cutting into the bone of your organization can leave ill prepared to take advantage of the recovery process.

Now I do understand that doing nothing today, might well mean that you don’t survive to see tomorrow…but, there are steps you can take to maintain strong corporate programs and show support to your key staff.

Consider outsourcing non-core competencies. If your company makes widgets, then you need to focus your energy on making widgets and selling widgets. However in order to successfully make cost competitive widgets and maintain earnings, it is necessary to maintain certain infrastructure elements of your business. Obviously you can’t simply eliminate traditional support functions such as Information Technology (IT), Human Resources, Regulatory Compliance, Maintenance, etc. But how you maintain those non-core, but critical nonetheless competencies will go a long way in determining how fast you make it through the dark forest.

Consider Outsourcing or Co-sourcing some or all of these elements to industry experts who can be valued partners enabling you to focus on what you do best!! There is a lot to consider before you source elements of your business. You need to critically think about the advantages and disadvantages to the sourcing solution.

Obviously there are tremendous advantages especially if your organization is not large enough to justify full time staff for these programs. Ask yourself, ‘Am I paying a full time employee to do a part time job?’ If the true need of the position can be accomplished in less than a full time equivalent (FTE), then why pay for that extra FTE? There are costs beyond payroll associated with FTE’s such as benefits (vacation, 401K matching, Educational assistance, etc) in addition you must pull other employees to cover the FTE duties during his/her vacation and sick days. This obviously increases operational costs and lowers productivity.

Find a valued partner and source that FTE’s function to them. You may even be able to keep the current employee either through an internal transfer, or sometimes asking your sourcing partner to hire that employee and assign them to your operations. Win, Win!! Your operational costs are lower, you never have to worry about coverage during vacations and you may even lower your worker’s compensation insurance costs.

Consider the sourcing of non-core competencies and find your way through the dark forest before your competitors do!!

Remember, as Will Rogers said…”Even if you on the right track, you’ll get run over if you just sit there.” Keeping moving forward at all times! Need more information?
Contact me.

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