A different way to evaluate outsourcing services
I have worked with computers both hardware and software for about 30 years now. I think it was in the eighties that I first heard the term “Total Cost of Ownership” or “TCO”. The purpose of this measurement is to be able to plan effectively and make wise purchase decisions. It allows you to make apple to apple comparisons. I believe I can demonstrate how this methodology can be applied to Internet marketing Outsourcing.
While you do not actually “own” the outsource worker you do own the relationship. And there is a cost of ownership in that relationship. To illustrate this point lets look at the direct costs and the somewhat hidden or obscured costs.
We can begin with salary. Whatever the number is it is fairly fixed. The only variations that come into play depend on your policies regarding sick time, family emergencies, holidays and vacations. Once these policies are in place the costs are very predictable.
After this the lines get a little blurry. Remember why you outsource to begin with. Ideally it is for a combination of four reasons. 1. The person is taking care of tasks that you do not want to do. 2. This gives you more time for higher levels of work or higher priorities in your life. 3. The individual adds to your expertise. 4. This work is done at a net savings to you.
The reality behind this can be very different. Let’s say that you find and hire someone from one of the many job boards that have popped up in the last few years. How much training will that person require? If this person is an untrained and inexperienced independent contractor you basically have two choices. You can use your time to create video training and pass them to the resource, and then hope they learn the material. The problem with this approach is that you just lost the 2nd intended benefit – time. The other option is to purchase training materials for the individual. This of course comes at a financial price to you and reducing the fourth benefit. And until this person has become a task master at what you want them to do you have also lost the 1st benefit.
With outsource workers there is an infrastructure cost. Who will pay to fix their computer or get the virus removed or bears the cost of a fast internet connection? With an independent resource it is you directly or indirectly. In the event of a PC failure – even if you do not pay the repair charges you will be losing valuable time while the resource tries to put the money together to have it repaired. If the internet connection is slow it is your productivity levels that suffer.
Tools: With them your resource may be a star. Without them….. who knows. So which tools do you buy? And in buying them for the resource do you lose the use of them for you? Once again there are tradeoffs. Better tools – faster work – greater productivity but at a cost. And that cost can be significant.
And while I would prefer to not bring it up there is another consideration – fraud. There is a temptation for the Internet Marketing Outsource worker to take on multiple clients. This may be ok in some circumstances. However, it is never ok when you have agreed that the resource will work for you full time. No worker can reasonably serve two masters at 100 percent capacity full time for more than a day or two.
There is a solution; Hire from an agency that provides supervision, training, infrastructure support and a complete set of tools to do the job. While many agencies provide some of these benefits as a standard package or on an ala carte basis, find that provides all of these benefits as part of the standard package.