What about the little guy?
Outsourcing is hard enough to get right when you are a big organisation. Now, imagine if you are a much smaller company, a Small to Medium-sized Enterprise (SME). If you are a company needing to buy a service from someone else on a small scale then you are not likely to think of offshoring it. You might think of outsourcing to an offshore partner, but for a small project there is no way you can go and personally check out the suppliers – the business trip might be worth as much as the project cost.
And, what about the suppliers? You might be an experienced supplier with a good track record of delivering smaller scale projects, but how does your potential future client know about you? They might be on an industrial estate far from London as you sit in an export-processing zone near Mumbai airport.
Outsourcing for smaller players is really difficult.
I asked Jaroslaw Czaja, the Chief Executive of Polish software development firm Future Processing, about some of these issues and he explained: “Currently a lot of our business comes from word of mouth recommendations and I think this is the most powerful tool for SMEs. Web 2.0 marketing, through its personal, groundswell-based nature, also works well and plays to SMEs strengths of being more flexible than larger companies and therefore sometimes being more willing to try something new. The online/forum grapevine of horror stories from destinations more geared up to larger scale outsourcing also works in our favour.”
Jaroslaw went on to say: “I think Future Processing is like many smaller outsourcers, we are an SME ourselves and often have limited resources to put into business development while always putting existing customers first.(But we also have a lot in common with our customers which is a great plus point). Some sort of online community for outsourcers who are SMEs themselves to find other SMEs to partner with would be really useful.”
I’ve been hearing these complaints from SMEs for years. Government agencies and trade associations often arrange trade missions for SMEs, but at the end of the day, unless the SMEs talk to each other there will be no progress towards creating more outsourcing opportunities for smaller companies. The NOA has worked for some time on helping SMEs and Bharat Vagadia, the SME director is currently working on a plan for a new series of workshops to help SMEs.
I have recently tried putting together a new business network that aims to try addressing some of these issues – to try driving small companies together, wherever they are located. It’s called Peerpex and it goes live in September, though you can register now if you are interested. And the first 500 suppliers to register get real cash credited to their account, so it’s worth signing up.
Take a look and let me know what you think – especially if you are an SME and working out how best to reach out across borders. I don’t think one website can provide all the answers, but it’s a push in the right direction.