As a sole entity, CAS has limited time and capacity to execute all aspects of the business. Outsourcing is a strategic decision taken by CAS to reduce costs and increase efficiency by hiring another individual or company to perform tasks, provide services, or handle operations previously done within the company.
Functional outsourcing for CAS as a single entity studio is limited to the specific non-creative functions listed below. Services that can be outsourced include technical aspects that stem from the creative process. However, these elements would not alter the creative outcomes, but merely support, and improve efficiency, capacity, and turnover.
The primary benefits and risks of outsourcing non-core creative aspects and administrative functions are summarised as follows:
Outsourcing benefits:
Reduce operating, labour and overhead costs.
Employing freelancers is more economical for CAS as work can be sporadic and senior designers or finished artists are extremely expensive on only needed on an ad-hoc basis. CAS is also not large enough to warrant full-time administrative services and salaries.
Focus more on CAS's core competencies, by outsourcing time-consuming processes to external companies, improving its competitive advantage.
CAS's reputation and profits come from the design conceptualisation and execution, where CAS needs to focus time and attention as opposed to the administration. Intricate illustrations, 3D renderings and Technical print set-up are time-consuming tasks that are cheaper to outsource to specialists. Simple, mundane design tasks, rollouts and style guide executions can be outsourced to Junior designers to free up CAS time for more complex work.
Free up internal resources and use the resources for other purposes.
Storm is CAS's biggest resource and should strategically spend the majority of her time on design executions, conceptualisation and client relationships. Any task that takes time away from that needs to be outsourced.
Mitigating risk by sharing risks with external parties and building meaningful partnerships. Outsourcing Legal, Accounting and Technical print setup mitigate risks for CAS.
Accounting and legal administration carry financial and litigation risks that CAS has to date carried. These activities are more efficiently managed by outside parties and will mitigate CAS's legal and financial risk while also adding to CAS's profitability.
Technical print setup should be outsourced to freelance finished artists to mitigate the risk of print errors, which can incur financial penalties and reputational damage to CAS.
Improving flexibility and efficiency by delegating responsibilities that are difficult to manage and control to external companies.
Websites, photography, styling, copywriting, brand strategy and naming are aspects of the design business that CAS can outsource and still markup while freeing CAS time to focus on design executions and conceptualisation. Each of these tasks is intricate, time-consuming and does not require CAS to individual execute.
Outsourcing Risks:
Loss of confidentiality by outsourcing activities or processes to external parties.
CAS finished artists, and junior designers will sign NDA’s to mitigate the risk of client confidentiality. CAS standard service agreements with contractors will also clearly outline what freelancers can and cannot put in their portfolios and the accreditation that needs to accompany it.
Loss of management and operational control of outsourced activities or processes.
To maintain operational control, CAS has managed all aspects of their finances. This is however not an efficient use of CAS time, and CAS will now outsource all accounting. CAS will mitigate the loss of operational control, but efficiently use their time by double-checking the books monthly.
Hidden or unexpected costs by companies work are outsourced to.
Outsourcing to freelancers can become costly if clients have multiple reverts or change direction. CAS will insist on intricate quotes, and the client will pass additional costs.
Lack of quality control, as outsourcing companies are often profit-driven rather than focused on doing a good job.
CAS executes all parts of the design process to ensure quality control and only outsources aspects others would do better, such as illustration, photography, 3D rendering etc.
The following aspects of CAS business should be outsourced:
- Accounting
- Technical print setup for finished art
- Junior design tasks – style guide executions, rollouts, illustration and icon design
- Intricate or specialized illustration
- Photography
- Styling
- 3D rendering
- Website design and programming
- Copywriting
References
Corporate Finance Institute (2018). Outsourcing - Learn About the Advantages and Disadvantages. [Online] Corporate Finance Institute. Available at: https://corporatefinanceinstitute.com/resources/knowledge/strategy/outsourcing/ [Accessed 4 Mar. 2022].