Out-Tasking: A Way to Get Started With Outsourcing
Should you out-task or outsource? If you’re not sure how to answer that question, you’re not alone. Many people are confused when it comes to out-tasking vs. outsourcing. However, they’re easier to understand than you might think. And once you understand their differences, you can begin to take advantage of out-tasking opportunities when you spot them.
A Quick Overview of Out-Tasking and Out-Sourcing
I think we all know that outsourcing is obtaining a service from an outside supplier in place of an internal resource. But not as many of us know what out-tasking is. Out-tasking involves obtaining a subset of a service (e.g., a task) from an outside supplier in place of an internal resource.
Then what is the difference between outsourcing and out-tasking for a boutique professional service firm? Outsourcing is a longer-term commitment with a capital investment that requires a fixed commitment with a measure of scale-up and scale-down within a tolerance band. Out-tasking, on the other hand, has minimal up-front investment and usually no fixed time commitment. It can be scaled up and down with no constraints.
Is It Better to Out-Task or Outsource for Professional Service Firms?
Generally speaking, out-tasking is better than outsourcing for small professional service firms for three reasons.
First, business task outsourcing (instead of all-encompassing outsourcing) is a better approach for boutiques because it is easier to implement. Most founders of service firms understand intellectually that moving work from internal expensive resources to external inexpensive resources will improve profitability. Yet so few small firms are doing it.
The reason for the hesitation is that outsourcing intimidates many founders:
“What if it doesn’t work?”
“Will the work be any good?”
“How do I manage people 10 time zones away?”
Outsourcing seems a step too far for many, whereas out-tasking is safer, easier, and digestible.
Second, out-tasking is faster. Negotiating a multi-year outsourcing agreement is complex and can take a long time. In contrast, out-tasking can be in production in a matter of hours.
Third, out-tasking is much cheaper than outsourcing. Platforms such as Upwork, PeoplePerHour, Freelancer, Truelancer, and dozens of others have created marketplaces for talent. They have flooded us with supply, pushing down prices. Just post a job and let the bidding begin. In most cases, the talent is impressive, and the rates are very affordable.
An Illustration of the Process and Power of Out-Tasking
Still not sure about which business tasks to outsource or why out-tasking could be right for your firm? Here is an example to bring the idea of out-tasking to life:
A member of Collective 54, who is in management consulting, has out-tasked the creation of PowerPoint decks. Her first use case was summarizing the output from executive interviews.
In her projects, it is common to interview 25-50 executives to get their perspectives on the current situation. And one of her deliverables is a deck summarizing those interviews. Before out-tasking, she created this deck herself. This was expensive. She is the highest-paid person in the firm, and this is time-consuming and can be completed by a junior-level employee.
After out-tasking this responsibility, she now simply forwards an audio transcript of the interviews to her out-tasker, and they send back a PowerPoint deck in less than 24 hours. The charge? $11/slide.
This is just one example of how a single out-tasked duty can save time and money. There are hundreds and thousands of similar use cases.
How to Overcome Outsourcing Disadvantages and Embrace Out-Tasking Instead
If you want to start out-tasking or do more of it, here are six steps to put into place to turn out-tasking from a one-off activity to a standard operating procedure in your firm. For the purpose of continuity, I will carry forward the PowerPoint example from above to illustrate.
Step 1: Consolidation
Consolidate your core processes and the tasks associated with each one into a master list. Get your hands on an inventory of tasks that could be candidates for out-tasking. Beware: This will be a very long list. It is not uncommon for this to be several hundred tasks. The opportunity for efficiency gains in most boutique pro serv firms is large.
Example: The PowerPoint out-tasking was one of approximately 75 possible out-tasking opportunities for the above-mentioned consulting firm. The founder previously didn’t consider how expensive deck creation was with how much her time was worth. Consolidating all those tasks put it on her radar screen as a possibility.
Step 2: Homogenization
Migrate away from an environment where there are multiple ways to perform a task and toward an environment where there is one way to perform each task.
Example: The consulting firm had up to 13 different employees conducting executive interviews. Each had their own interviewing approach. During step 2, they settled on one executive interview form.
Step 3: Deconstruction
Deconstruct each process and associated task so it can be re-engineered for gains in productivity. Be sure to truly understand how a task is completed.
Example: The executive interviews were not originally recorded. Rather, the employee conducting the interview took notes, with some note-taking on a yellow legal pad, some on a PC, and in some cases, a junior associate would participate in the interview just to take notes.
Step 4: Editing
Edit the tasks deconstructed in step three. That way, you can eliminate waste (i.e., unnecessary effort performed out of habit).
Example: The executive interview process was edited so that the employee conducting the interview recorded it on their iPhone. An app was used to transcribe the audio into text. Both the audio and text were stored in a Dropbox folder.
Step 5: Automation
Inject technology to automate the task-completion process as much as possible. Automation will allow the out-tasker to perform the job.
Example: The automated iPhone audio capture, the app transcribing to text, and the cloud storage were the tech pieces that enabled the out-tasker to receive the raw materials and create the deck. The deck was being created while the founder was asleep. Without the tech, this would not be possible.
Step 6: Out-tasking
Jump into a few talent marketplaces, post your job, receive bids, and hire an out-tasker.
Example: The founder posted the task to several talent marketplaces. She selected 24Slides because they offered the best per-slide pricing.
Want another example of how out-tasking can become your competitive advantage? Listen to member Jeff Pedowitz discuss how and why he has begun out-tasking by moving work to South America.
The next time you start contemplating an outsourcing move, reconsider. Frequently, out-tasking could be a wiser solution that will lead to improved returns without the risks and inconveniences associated with outsourcing.
Outsourcing and out-tasking are often discussed in the production or delivery of services. But should you outsource sales? That’s a completely different question and requires you to define the type of needs you’re tackling in the sales conversation. If you’re curious about this, view the video: Should You Outsource Sales? 4 Ways to Know