Tech & Work

Should you subcontract?

We can never know everything about IT, so we're sometimes faced with the choice of turning down work or farming it out. Columnist David Parkinson weighs in on how to make the all-important decision of whether to subcontract.

As your consulting projects are rolling along there will inevitably be a requirement from an existing or prospective client for a service that you cannot fulfill internally. Thus, you may be thrust into a position to consider subcontracting the work.

All businesses in all walks of industry face this problem, so you shouldn’t feel that you’re not living up to your customers’ expectations. At this point, you have a choice. Either you refuse the work after considering the situation carefully or, after evaluating the options and the opportunity, you farm it out. This is a huge area of discussion, which financial controllers, project managers, and CIOs will all have a take on. Let’s discuss what it means for the growing consultancy.

Evaluate your options
It’s hard to turn down work, so a number of factors need to be brought into the light before making the decision to take or turn away the job. Some of these might be:
  • Does the work expand on your existing offerings? If so, it might make a lot of sense to bring in a subcontractor to help you with one element of a project. For instance, you might take on a cabling contractor to offer a complete network installation or an SQL Server specialist to take care of a database configuration while you complete a server platform migration. By doing this, you are incrementally expanding your product offerings to your clients without taking a quantum leap sideways into a new set of services. You need to be careful not to offer too wide a selection or you won’t be able to identify yourself as a provider of anything in particular.
  • How well do you know the prospective subcontractor, and can you trust them? When you put someone else in charge of the service you perform for your clients, you are putting your good name in someone else’s hands. That much should be obvious, but it goes beyond just the technical quality of their work. If they have client relationship responsibilities then make sure they portray your business as you would. By the same token, they should remain a professional distance from your client.
  • Will you be able to learn from shadowing the work? When you bring in a subcontractor to supplement your skills, will you be able to free an intern’s time up to work with the subcontractor? If you want to be able to offer the service in house in the future this might be a far more valuable training alternative to classroom lessons. If this is your intention you might want to make it specifically part of the subcontractor’s remit to impart the knowledge onto your staffer. If you don’t, the subcontractor may be overly cautious of someone watching his or her every move. If you do, the subcontractor may want to charge more because he is probably working his way out of future work by teaching someone else. You might also want to consider whether you always intend to bring in a subcontractor for this particular work. If you do, you might be better just letting them get on with it.
  • Are you subcontracting because of the size of the work? One of the most common reasons to subcontract work is because of the size of a particular job. It happens from the IT industry through to the building industry and keeps thousands of engineers and builders in work. You should be careful you don’t overstretch your permanent organization, though—subcontracting others will involve some administrative overhead on your part, and that needs resourcing, too. If you’re subcontracting work that you’d normally be able to do if there weren’t so much of it, you might be able to keep an eye open for more work of its kind. That’s growth!

The last word on subcontracting
Taking on a subcontractor to allow yourself to pick up a particular project can be highly beneficial for your business. They can provide you with an additional skill or extra resources within your existing skills to enable you to take on work you’d otherwise lose.

If you start taking on subcontractors repeatedly for the same reasons, you may want to consider bringing on these resources internally. Digging deeper, you may find that your firm is less suited for consulting and would be a better fit as a reseller of skills, a broker, or an agent. Always keep a tight reign on the costs of hiring subcontractors, and investigate the liabilities of your hires so you know where you stand should things go wrong.
Do you hire many subcontractors? Do you get many calls to do subcontracting work? How do those projects work out? Give us your thoughts by posting a comment below. If you have an idea for an article, please send us a note.

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