Outsourcing is a business function that offers undeniable value to those who don’t have their own resources onsite. However, many growing businesses, both large and small, have found themselves asking the question: "Is outsourcing right for my business?" While there certainly are advantages to doing so, outsourcing can be an expensive venture too, and if you take a careful look at your business and its "growth strategy", you may find that it does not fit within your budgetary restraints.
Still, we cannot ignore that more and more businesses are outsourcing their IT, Human Resources and Accounting services all over South Africa. Since they are not only surviving, but thriving, there must be some sense to outsourcing these 'departments'. So, when is the right time for you to consider outsourcing?
Some of the more successful outsourcing functions, such as the above-mentioned, should be employed when:
- You cannot afford a person or department to perform the function
This applies more to small businesses and startups rather than businesses established over three years with larger infrastructures. Basically, a business with marginal working capital lacks the resources to hire the necessary people for their payroll system, their IT needs or their HR compliance. In this case, outsourcing these non-core roles is ideal.
- The service you get elsewhere is better than any prospective in-house division
Dell is well-known worldwide for outsourcing their call centre services to Indian companies. This allows Dell to enjoy considerable savings as it is a cheaper alternative. These companies also strive to ensure that their staff members are well-versed in their products and services, while always being helpful and friendly when interacting with clients.
- When you and your team work remotely
A business that has no official office or primary physical base, and normally operates with staff working remotely, will absolutely benefit from outsourcing their business services to those companies that possess the necessary skills and experience in various functions. This is most common with startups and new entrepreneurs who rely on email and Skype to communicate with team members.
Though there are clear advantages to outsourcing, a business owner needs to be smart about what they outsource and what they keep in-house. For a large advertising agency, it is better to keep a creative studio in-house, so that urgent projects and amendments can easily be tackled. However, it may be better to outsource the services of an events company, a production house and others to effectively meet client’s overall needs.
Before you consider outsourcing, ensure that it is necessary and satisfies your budget. If you can hire one highly experienced payroll administrator for a lower cost than outsourcing your payroll solutions, then make a judgement call based on your company’s budget and immediate needs. However, if used appropriately and at the right time or season of your business, outsourcing certain functions can serve to improve your productivity and customer service while saving you money!