Finding your tipping point for the outsourcing decision
When it comes to the decision to outsource, there is no one-size-fits-all answer. The questions companies need to ask about outsourcing aren’t universal either. They are unique to each company’s situation and dependent on the outcomes required. Generally speaking, outsourcing is a mid-level growth strategy that makes sense in many situations. But how do you determine when outsourcing makes sense for you? The philosophy of outsourcing is based upon the premise that the provider can either bring services or resources that the company doesn’t have or can perform the service at an overall reduced cost. Many companies outsource engineering, payroll processing, or benefits administration because they haven’t reached a size where having a full-time staff makes sense. Is there a point at which the decision to outsource changes? For this discussion, I’m going to use a fictitious data center company to examine the question – talking specifically about facilities operations outsourcing. Let’s call the company ABC Data Centers. Let’s assume that this company has two data centers and is building more. It’s expected to have a total of five by the end of the year. Both data centers and the company headquarters are currently in the same local metropolitan area, but the three planned data centers are in other metropolitan areas. The first data center was staffed by a facilities manager that was hired on early in the company’s beginnings....
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I have worked in the nuclear industry for over 20 years and one of the major tenets of the industry is training. We train you when you first get here, we train constantly while you’re here, and we train you when anybody learns anything about anything relevant. Needless to say, all this formal training costs. It is not uncommon for the training budget to be one quarter of the operational costs of the site. Training is mandated by law, regulations, and good practices. After all who wants people operating nuclear power plants who are not properly trained? With all this training I had the opportunity to work with some of the highest trained and operationally ready people in the world. It was a wonderful experience. I support and believe that the consequences of failure demand this type of training routine and program. Most mission critical facilities organizations cannot afford to support this type and level of training. That is the hard reality of economics of our industry, so what can we do?...
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