Why Shouldn't You Outsource What You Do not Know How to Do?

This week, Ricardo reflects on companies' benefits and challenges with the visible increase in interest in outsourcing activities, especially concerning outsourced activities due to incapacity and lack of knowledge about work.

He ponders the damage that the lack of knowledge, mastery of technology and know-how, can generate in the project's sustainability and its benefits.

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Episode transcript

The transcript is generated automatically by Podscribe, Sonix, Otter and other electronic transcription services.

Ricardo (4s):
Hello everyone. Welcome to the five minutes podcast. Today I like to talk about outsourcing in a way I want to talk about this because of course it's a big trend, right? That everybody wants to Outsource everything, because there is a lot of economic value on doing that. So for example, I need to do part of the work in my project or in my initiative. So what I do, I hire company to do that at work. I had an older company to do water part of the work, and they have a competence speed and maybe a good price. And then at the end, I have a good mix that deliver the results. That's perfectly fair, but I would just to go a little bit deeper on that and share with you some of the concerns I have on that, the first thing we need to understand why you're outsourcing.

Ricardo (51s):
And there are basically two pillars of rational to justify you doing outsourcing. The first pillar is knowledge. You need to outsource because you don't know how to do so. You outsource because this company comes with the expertise and they do the service part of it. The second one it's because of volume or your capacity, for example, you know what to do, but you don't have arms to do so then you need to hire more people, hire more companies because instead of building one building, you need to be at 10. So we do need to scale. What is the difference between these two?

1 (1m 31s):
It looks in terms of procurement, it looks but pretty much the same, but it's essentially different in terms of risk. The first one is knowledge. So mince, you are outsourcing 'cause. You don't know how to do it. So you create the dependency from the supplier that boots you in a more fragile environment. Y because on the second case, when it's only volume, it means, look, I can build 10 houses. I know how to build. I know how to put the breaks. I know how to install the door. I know how to do plumbing. However I don't have arms lags to do.

1 (2m 14s):
Then what I do, I hire 10 companies to help me to do that. But I have the knowledge, the knowledge in this information, society relies on me going back to the first point let's suppose you were doing digital transformation in your company. And this is something that also learns me many times is that you are a company or a consulting, but it's not the consulting because consulting, if someone that gives you advice and you do know it's basically an outsourcing. So these companies, they come with hundreds of consultants, they feel your floor to deliver your digital transformation. What do they bring? They bring knowledge.

1 (2m 55s):
They bring the brain. And what happens when they depart the brain goes out and the body does not work with outbreak. So this is for me, the key point. And maybe you may think, Oh, Ricardo is saying that right? Because he Ricardo do not think you should. Outsource knowledge, please. It's not that you can outsource, but do you need to be completely mindful that you need at some point through learn because otherwise you will become yeah. For the effort, the dependent on that dependent on that. So we need to create a learning organization.

1 (3m 37s):
So you bring the consultants, you bring outsourcing and you put your team to learn and, and Dan, you, your company, your project learnt, and over time, you learn more, learn more, more, more, more, Dan, you have the full control of what you do. Then you can, Outsource the way you want it, because you are outsourcing just arms and legs. You are not outsourcing the brain and you, or I would say your knowledge. These are, this is exactly what I'm talking now. So let me give you a final example. I think that we'll will help. A lot of people thought about fishing right at the fishing and the fish.

1 (4m 19s):
So lets suppose you know how to fish, okay? So you are you sure? And then he said, Oh God, with this setup here, I can fish one fish per hour. So, and I need 10 fish because I have a lot of people to feed. So what do you do? You hire other fishermen to work with you. And then you go your fish and fish to per hour. But you know how to fish, you know, you're just doing that because you want more features on the other side, you don't know how to fish. Then you have to, I have fishermen and you stay on the beach, sitting, waiting for the fishermen to give you the fish. The fisherman goes there.

1 (5m 0s):
Fish brings you the fish. Next day brings you the fish eat. If you do not start saying next time. And can I go fishing with you to learn how to use, to learn, how to navigate, to learn, how to find where the fishes are, what will happen in 10 years? Will you become a fishermen? No, you will not. You will realize for that right on the receiving a fish. And if the fishermen tell you tomorrow, no I'm not fishing anymore. Or I'm not doing that anymore. Or it's over. It's over in DCIS. Is it exactly why it's so important for you in this knowledge society that can improve your skills.

1 (5m 41s):
And when I say your skills, I'm not saying you that are listening to this podcast, I'm talking to your means your company or your team. You need to create a smart company is Martin as a team that is able to learn, learn, learn, because this is exactly what we will reduce dramatically, your risks. And you will not just rely on the success of your project, your company, to someone else. And these are, this is exactly the tricky thing that is behind this outsourcing concept. This is why it's so important to study. It's so important to get the knowledge because the knowledge will protect. You. Think about that next time you are doing Outsource to understand if we are doing it because of volume or because you have no knowledge and this will impact dramatically your result.

1 (6m 32s):
I hope you enjoy this podcast and see you next week with another five minutes. Podcast.

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