- Why is it so expensive? I can hit with a hammer too…
- But I know exactly where to hit.
– says the old joke. However, it is not a pun, but reality itself.
Based on a true story
In business, the scale is broad: on one end of the line, companies boldly step into the field of action, engaging an outside expert, thus accelerating the influx of market expertise and expanding their capacity. On the other end, they solve their projects independently, building up internal knowledge and training expertise.
When do we need to start involving an external expert, and what can be solved in-house?
Nowadays, 70% of digitalization projects fail, and that rate is far beyond significant. It is huge.
But what are common pitfalls? How can an external expert help to make HR digitization more successful?
Instead of an introduction
I represent both sides at the same time. On the one hand, the company I work for relies partly on outsourcing external HR digitization experts. On the other, we also have external participants to bring in more expertise “from outside” simultaneously. Nonetheless, the purpose of my writing is not to justify total outsourcing but to point out that it is essential to be aware of our goals in similar situations. Nowadays, we have three paths in the case of HR digitization projects:
1. we solve the project from our capacity and expertise,
2. involve an outsider part-time or for all of the project,
3. we do not solve it.
In the following, I would like to analyze some of the counter-arguments I heard in the HR field.
“It costs an arm and a leg.”
The general belief is that engaging an outside expert is a costly operation; however, it is always important to look at the other side of the coin. Suppose that our company has reached the point where we need to keep our HR records in order and we decide to introduce an HR software for this reason. Relevant professional experience is required to prepare this project as it is not part of the internal expertise. So we need to ask the following questions ourselves: Is it worth replenishing the knowledge within the house, or is it better when we get it ready? Is it worthwhile to train our existing staff further, take the risk, waiting for their success? Is it worth recruiting for these vacancies and reorganizing them? Or is it better to get ready-made software implementation knowledge that is more expensive than an in-house employee? A lot on your plate, so these are all worth considering.
“The answer is at our hand.”
Competency will not solve anything if there is no free capacity. By involving an external expert and expertise, we can solve the lack of internal capabilities and the impossibility of allocating them to the project; with money, we can replace the missing internal energies and staff for a transition period.
“Money is tight.”
We only use external experts’ work for specific projects, and it only costs money as long as the project itself lasts. After outsiders, we do not have to pay employee contributions; we can save on training and development costs and other expenditures. Also, let’s not forget that companies cannot let go of an employee just because a project has ended..
Therefore, the comparison is not on the outsider vs insiders level; we need to examine and analyze this on the outer vs “no expertise available” projection. The joy over the cheaper solution fades quickly because the quality of the product will be objectionable.
“There is no budget for this” is also often said as an argument. However, I share the view that there is no budget only for what we do not want, and for what we need, we can set aside the right amount.
“Losing internal knowledge-capital.”
We must exploit the external expert’s market knowledge and project experience during the joint work. External consultants have certainly gained practice in several similar projects and are familiar with pitfalls, so they can also help us avoid costly dead ends. Staying with the initial example, they enable us to avoid the extra cost, time, and stress of poorly a selected HR software. It is worth involving an outsider only for a certain period but the knowledge brought in during the work together gives irreplaceable value to our company.
“Only paying the bills.”
Never judge a book by its cover; they fill the bill. The goal of the external experts is a sustainable and continuous assignment; they will receive more and more jobs if they do not unnecessarily “burn” the customer’s money. At the same time, they also have a kind of contradiction: they want to invoice as much of their daily allowance as possible, but they cannot miss agreed deadlines. During the agreement, we must set targets, deadlines, and the acceptance of the conditions for the external expert, so that the issue of paying for causeless time does not arise. Unfortunately, the customers often do not clarify what they expect from the outsider. In this case, the expert has to define the whole task and bill the customer.
Principles and experiences
The “gig economy” process is widespread worldwide; many freelancers contract for one-time assignments and projects mainly through digital platforms. However, longer-term (even simultaneous, multi-project) collaborations are also prevalent. The principle should be that
we only involve an outsider when we need unique knowledge and capacity building.
If we plan for long-term cooperation, we must ensure that the external expertise can always bring new knowledge and that and that sharing market experience is a regular part of the job.
Of course, we should consider business confidentiality when sharing information.
This article was published in Munkajog in December 2021.