In-house vs outsourcing – which is really best for your business?

Outsourcing

As the business grows, most business owners will need to decide if and when to start outsourcing, asking the question –

“should I hire more staff to handle specific functions and tasks, or would it be better to outsource”?  

There is often an initial resistance to outsourcing, as those new to it worry about losing control of the functions or tasks that are being outsourced, or that it will be expensive, or perhaps feel that because the task in question is something they can do themselves, they should do it themselves. However, in most cases, outsourcing would actually be the better option for the business.  

Focus on what’s important  

Just because you can do something, doesn’t mean that your valuable time is best spent carrying out that activity. This is particularly true of things that are either not within your key skill set, or tasks and activities that are not revenue-generating for your business. Your time is limited, so it makes sense to focus your time and energy on what’s most important for your business and outsource those things that are less business critical.   

We outsource our own bookkeeping  

For example, despite being a team of qualified and experienced accountants here at Artemis Clarke, we know the tasks of bookkeeping and accounting are not revenue-generating for us, and any time spent doing our own bookkeeping and accounting takes us away from serving our clients and candidates. So as a business, we took the decision some time ago to outsource our bookkeeping to the very capable Louise Coleman at LAC Accounting (although we also recommend Brad Whittock at Whittock Consulting, Oli Thomas at Purple Lime and Helen Bassett at Smith & Williamson). This means we can now focus our time and efforts on our ‘day job’ of evaluating our clients’ needs (in our Finance Team Diagnostic Sessions), and then finding the right candidates to meet those needs much more productively than when we were trying to ‘do it all’.  

As well as Bookkeeping and Finance, there are a number of functions that naturally lend themselves very well to being outsourced, including IT, HR, Customer Service, Business Admin/Process, and Marketing (which we outsource to Pip and Sian at The Marketing Architect).  

How to spot a strong contender for outsourcing 

If you’re new to outsourcing, it can be difficult to know where to start, so we’ve put together this handy checklist to help you work out if the task or process is a good candidate for outsourcing. If you can answer yes to four or more of these questions the task or process may indeed be a good candidate for outsourcing 

  1. Is it a well-defined (and ideally, self-contained) business process with clear boundaries?
  2. Is it something that is outside of your own area of business expertise? (Although this is not a ‘must-have’ as our own example shows.) 
  3. Is it a task or process that does not generate or boost your business revenue? 
  4. Do you sometimes need to flex delivery of this task/process up or down? 
  5. Would an expert be able to perform this task/process quicker and more efficiently than you and your team are able to? 
  6. Would it cost less to outsource this task/process than the salary of an inhouse member of staff?  

Remember, a key benefit of outsourcing the task or process is to free up time so that you and your team can focus on your core business and its key revenue-generating or revenue-boosting activities. This means that even if you CAN perform the task in-house, you should outsource it if you know the time spent on that task could be more productively spent building your business.  

Having an expert on-hand 

Another great benefit of outsourcing is that you gain access to expertise that would otherwise be unavailable to your business. Aside from the cost of hiring say, a new IT manager to look after your network infrastructure or solve your IT support issues, the cost of ongoing training and development to ensure they maintain their expert status quickly adds up.   

Don’t be put off 

Finally, business owners often consider outsourcing, but dismiss it as being ‘too expensive’ (it’s not), or because they worry it could lead to a lack of control, or that their customers or staff will react negatively. None of these should prevent your business from outsourcing.  

Choosing the right supplier, and then building and maintaining a strong working relationship with that supplier will prevent any loss of control from happening. And communication is the key to preventing negative reactions from customers and staff. The former just want to know that your business will continue to deliver the same level of service or quality of goods as it always has, while staff want to know that their jobs are secure now and in the future. In both cases, it’s a good idea to outline very clearly exactly what the scope of the outsourcing is, so that staff and customers know how it affects them.  

It goes without saying that outsourcing should never result in a poorer service for your clients, but if it can deliver some cost savings for them at the same time as maintaining standards, most clients will be more than happy – as will staff who are reassured their jobs are not about to be outsourced, and their time can be freed up to focus on their core competencies more productively.  

While it won’t be right for every business, we believe outsourcing the appropriate tasks and processes to a partner you can trust to deliver can be a real game-changer for most SMEs. 

  

Photo by Markus Winkler on Unsplash