LivingQ
Your Agile, Affordable Staffing Solution.
- 14 Elsham Road, London, W14 8HA
- info@finsera.co.uk
Case Studies
Copyright © 2024 Finsera All rights reserved.
If you’ve never outsourced aspects of your business before, the mere thought of handing over work to an outside party can be daunting. That’s understandable, since many leaders find it difficult at first to trust an external provider with key components of their companies. However, if you’re looking to reduce costs, maximize efficiencies, gain access to skilled resources and/or scale your business, outsourcing could provide the critical support you need to strengthen your organization and drive sustainable growth.
The following FAQs highlight what you need to know about outsourcing and what actions your organization can take to determine whether outsourcing is right for you.
Outsourcing is delegating non-core business functions to external service providers so you can focus on what you do best: the strategic, value-add aspects of your organization. Essentially, outsourcing provides you with a dedicated team that is just a phone or video call away instead of just down the hallway—no different from large corporations that operate multiple office locations.
When you outsource a job function or process to a skilled third party, you gain their expertise in that type of work. You also minimize the time and money spent on that function.
For instance, if you need to get your car’s oil changed, you can do it yourself by buying the oil, learning the process, getting greasy and devoting significant time to it. Or, you can find a specialized service provider who will take care of the entire process for you efficiently, correctly and at a reasonable cost
Outsourcing is not synonymous with offshoring, and it’s not limited to call centers or any other specific type of business process. While offshoring is a type of outsourcing, many organizations outsource a variety of important functions to domestic or even local providers.
The range of functions that can be outsourced is vast — accounting, finance, information technology, human resources, legal and administrative, or back-office functions are among those most commonly outsourced. However, outsourcing can encompass many departments and industries.
Organizations choose outsourcing for a variety of reasons. One top motivation is mitigating in-house turnover. By outsourcing certain functions, you can avoid continually onboarding new employees and instead rely on the consistent availability and expertise of external service providers.
A common example of a turnover problem is when longtime employees retire, taking decades of experience and institutional knowledge with them. Instead of trying to fill the void with new positions and new workers, outsourcing makes it possible to quickly fill the gap with specialized third-party talent. And because your outsourcing provider is responsible for keeping their people educated on the most recent compliance, technology, and industry trends, you don’t need to worry about devoting time and resources to continuous training.
An organization undergoing a digital transformation may also choose an outsourcing solution. Let’s say you want to update your technology to improve operations, but you lack in-house expertise or have change-averse staff (those who resist adoption or might leave the company). In this case, outsourcing would be an excellent option to help facilitate a complex technology implementation without hiring and training new employees.
Outsourcing can also improve morale among your best talent. When labor-intensive, errorprone activities are delegated to a third-party, employees don’t have to spend their time on tasks that are not well-suited to their strengths or interests. Instead, they can shift their focus to areas they find more valuable and rewarding, which will likely result in better retention as well.
Last but not least, outsourcing provides affordable access to high-level expertise. For instance, you may not be able to afford a full-time CFO or controller, but you can gain that expertise by outsourcing these roles to an external service provider. Outsourcing to a team that includes an as-needed CFO provides your organization with scalable talent. Additionally, your organization can leverage that entire team’s breadth of experience rather than relying on the skillset of just one full-time employee.
For these reasons, many organizations thrive when they use outsourcing services.
Outsourcing can take different forms depending on an organization’s needs. There are three main outsourcing options: supplemental outsourcing, total outsourcing, and enterprise outsourcing.
Supplemental outsourcing is an option if you have existing staff but require additional support for specific duties that are unpopular or challenging to fill permanently. This could include short-term projects or roles that don’t offer clear career paths. This can also include temporary (“temp”) labor to fill transitory gaps or openings.
Alternatively, total outsourcing involves outsourcing an entire department, from top to bottom.
Lastly, enterprise outsourcing involves outsource non-core functions that are not related to your company’s mission. For instance, you may choose to outsource your accounting, HR, finance, IT, compliance, or marketing departments.
The benefits of business process outsourcing (BPO) are numerous:
Organizations of all sizes and stages can benefit from outsourcing, including:
Startups and/or small businesses – Outsourcing can help startups and small businesses scale quickly without needing to invest in complex, expensive infrastructure or hire fulltime employees.
Growth stage and/or medium-sized businesses – Outsourcing can help these businesses save money on overhead costs and focus on their core competencies and growth.
Mature and/or large corporations – Outsourcing can help large organizations increase profit margin by improving efficiencies and accessing specialized expertise that is not available in-house.
Nonprofit organizations – Nonprofits, which are often looking to do more with less, can use outsourcing to alleviate their administrative burdens and devote more time to their core mission.
The decision to outsource a process depends on various factors. If a process is straightforward and consistent in terms of timing or process steps, outsourcing can be a great option. Outsourcing might also be a solution for work that can be documented in a repeatable and/or predictable workflow. Easy examples are accounts payable, monthly forecast updates, and payroll.
However, other factors should also be considered. If the work requires onsite, close supervision or constant updates, it might not be a good fit for outsourcing. Examples include inventory management and cash control work.
Your personal perspective also plays a role in this decision. If you possess expertise in and are comfortable managing a particular department, it may make more sense to keep it inhouse and outsource other departments. Ultimately, it is crucial to assess your organization’s needs to determine what can and/or should be outsourced.
Outsourcing can be a valuable way to increase efficiencies, lower costs, improve morale and gain access to specialized expertise. By conducting thorough research and analyzing your unique circumstances, you can determine whether outsourcing is the right fit for you and can choose the option that best meets your specific needs and goals.
Contact our Outsourcing experts to learn how to leverage outsourcing services for better performance at your organization, or explore other ways to take control of your operations for maximum efficiency and profitability.
Your Agile, Affordable Staffing Solution.