News: February 2012

Outsourcing in 2012

In today’s tough economic times many cash-strapped businesses are seeking new ways to reduce costs. As such, many firms are looking into outsourcing as a means of cutting costs while maintaining business functions necessary for growth (accounting, payroll, I.T. and so forth) without the overheads associated with full time employees.

Outsourcing is essentially any business operation or process that could be performed by you or the employees within your business, but is instead contracted out to a third party.

Many business owners find they are working in their business rather than on it. They may be caught up in administrative tasks when they really need to spend more time on business development, marketing and sales. This can be a source of stress for business owners / managers, who are already juggling their responsibilities to customers, suppliers and staff.

There are only so many hours in the day and if managers try to do everything they will inevitably fall short and the business will suffer as a result.

Outsourcing functions such as payroll, invoicing, customer service and secretarial services gives the staff the time and the freedom to spend more time working on developing the business through sales, marketing and customer service.

The first step to implementing a successful outsourcing programme is to decide which tasks to outsource. Taking the decision to outsource often sensitive and business-critical tasks such as invoicing or payroll isn’t straightforward. It requires the business owner / manager to put a lot of trust in a third party. In owner-managed businesses in particular, it can be hard for management to relinquish control.

A manageable way to embark upon an outsourcing relationship is to start by delegating less critical tasks such as typing services or administrative work. At the beginning each party needs to learn how to work together and communicate effectively in order to establish a sound business relationship. As the outsourcing arrangement begins to yield results the business will get a feel for the competencies of the outsourcing partner / service provider.

Over time, management will become more comfortable with the idea of outsourcing and the business will then be able to maximize the benefits of the outsourcing programme — management will have more time to spend developing the business whilst benefitting from reduced staffing costs.

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