To outsource or to engage a consultant

Blog Reads: 112

04 - 01 - 2021

Penned by Lakshmi Palecanda

3:35 min read

Every entrepreneurial venture has a lot of aspects that need catering to. You may find that you lack expertise in a key aspect of your venture, and realize that you need outside help.

Here are two ways in which you can get the help you need.

Engaging a consultant

A Consultant is a person who is in the business of giving expert advice to other professionals. He or she is an expert either w alone or belongs to a firm of experts. The consultant comes, advice, trains, facilitates, creates strategies, and streamlines operations.

Consultants are used mostly to address a specific challenge or initiative, strategy or model. They may not be engaged on a massive scale and maybe for a finite period. In essence, they tell you what to do, walk you through the process, and you do it.

In the case of Consulting, the responsibility is that of the in-house point person or department to drive results and measure progress. The implementation of the plan remains with the company. Usually, there is an in-house co-ordinator or manager who will be responsible for pushing the plan forward. The onus rests on the shoulders of the in-house manager.

A classic example would be training your staff in cost-cutting measures for a business. A consultant would examine the procedures and come up with some measures that he will explain or give training to the staff concerned.

Outsourcing

Outsourcing is contracting a part of the business process or non-core activities to another party. This includes both foreign and domestic, and sometimes relocating a business function to another country or offshoring. In other words, you get a third party to do a certain function for you. This takes advantage of a lower cost of international resourcing. Here, the execution of the plan is the responsibility of the third-party firm. The hiring firm relinquishes some of its control to the outsourced provider. There is no day-to-day oversight from an in-house person. The provider keeps the hirer engaged by letting him know the progress periodically. He reports directly to the senior management or the owners and shareholders.

Of course, it goes without saying that a company should outsource a job only if it does not have in-house expertise and if it is cost-effective.

For instance, if the owner of a bakery wants his accounts kept in order, he might outsource his billing to an outside firm that specializes in bookkeeping.

Advantages of a Consultant

If you want your employees to learn new skills that they can implement themselves after training, you call in a consultant or a consultancy. You can reduce costs by hiring them for only a short period.

Advantages of Outsourcing

You can choose to outsource a secondary aspect of your business if you want to keep focusing on the main aspect only. Outsourcing providers have employees who are knowledgeable and experienced in the matters that the hirer needs help with. Also, the third-party firm can be held accountable for the execution of its own responsibilities, with little or no oversight.

Making the choice

As an entrepreneur, you should evaluate your strengths and weaknesses in the various areas of your venture. Depending on your needs, you can decide to go with either a consultant or go in for outsourcing.

Sources

1.Body shopping vs Outsourcing vs Consulting - a perspective change and paradigm shift – Giri Nair, linked on April 16, 2016 2.Marketing outsourcing vs. marketing consulting: what’s the difference? Debra Andrews marketri The difference between consultant, contractor or outsourcing Dr. Laureen, Dept ( link to the site )

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