Outsourcing is the function of buying in outside expertise for a specific task or project that you don’t have the want, time or skillset in-house to do.

There can be many benefits of outsourcing in business, here are a few of them:

• Efficiency improvement
• Access to high level skills in specific areas
• Freeing up time
• Cost efficiencies

What

Businesses in different industries will undoubtedly need to outsource different things. For example, an accounting firm will do their own accounting and an IT firm their own IT. 

To determine what you should be outsourcing you’ll need to look at a few factors:

• Your business strategy; there will be business critical things linked to your strategy that will dictate that you can’t outsource some tasks. For example, if your strategy includes high quality customer service, that’s something you’ll want to do in house so you have the ultimate control over it
• What elements of the business does it make the most cost-sense to outsource; see our article on Cost Benefit Analysis to know a bit more about this one. Basically there are some areas where it’s more cost effective to outsource, like printing large quantities of leaflets or documents. A printing company can do this far more cost effectively than most businesses can do in-house
• What are you spending time on unnecessarily; if you’re spending a lot of time on non-earning tasks, that means you’re not earning money for your business.  It’s likely you need to seriously look at outsourcing, in order to free time up so you can concentrate on earning related activities
• What processes take a really long time; some tasks that take a long time are inevitable, but to drive profit efficiency is key. So, if you have a long-winded process can you outsource any of that to create efficiency?
• What can’t you do; some skills won’t be available in-house, and they will be an absolute must in business, like IT and accounting. You’ll need to outsource these to make sure it’s done right
• What do you just not like doing; if it’s not business critical that you personally do it, it can probably be outsourced. Admin is a good example of this

How

Once you know what you can outsource, how do you actually go about the outsourcing?

• Firstly, choosing the right business or partner to outsource to is key.  Don’t just chose the first company you come across. Do your homework, interview the company, determine if they’re a right fit for your business and personality-wise too
• You get what you pay for; some areas you’re going to be looking for cost efficiencies. In other areas you’re going to need to pay to get the right level of expertise.  In these areas where having a high quality outsourcing partner is key. The quality price you pay for it will pay off in the long run.  So don’t scrimp and save and have it cost you long-term
• Have a process; whatever you’re outsourcing it needs to be done in an efficient way, this means having a process.  That’s having a process for outsourcing, as well as making sure everything is being done as you want or need it to be. 

We can act as an outsourced finance team for your business – get in touch to find out how we can help you.