After years of frustration as the CFO of a mid-sized R&D company, managing what should be a service-oriented function but was often more of a roadblock, I was convinced there must be a better way. So in 1993, I started a financial outsourcing firm with the goal of providing the traditional array of accounting services on an as-needed basis, in a way that was customized to our clients’ needs. This business has grown to include HR and IT services, servicing a significant number of companies, many of which are nonprofits. I’d like to share what we’ve learned over the years.
What are the Advantages of Outsourcing?
The organizations we work with typically span from start-ups to well-established businesses and range anywhere from $1 – 20 million in revenue with between 2 – 200 employees. At this size, organizations need a leadership team as well as accounting, HR and IT support. Often times the situation we encounter is that executive staff is attempting to simultaneously manage a leadership role while also handling the essential core business functions. For this reason outsourcing with a trusted or referred resource can be a good option.
Many also look to outsourcing because:
– Outsourcing provides a wealth of resources. Working with an outsourcing firm provides you with a team of experts. When a question arises, they have direct access to many individuals with varied expertise who can collaborate to address your needs. You are not relying on the experience of a single staff member.
– Outsourcing provides immediate access to best practices. By working with hundreds of other clients, outsourced professionals have a unique perspective on what truly works and have insight into the strategies other companies employ to operate efficiently. Benefit comparisons, system infrastructure, software and tools have often been vetted. Outsourced professionals can save you time in exploring options and make valuable introductions.
– Outsourcing provides access to skills that are otherwise not accessible or affordable. For the equivalent of one individual’s salary, by outsourcing a finance function for example, you gain access to the expertise of a CFO, Controller and Bookkeeper. You have the ability to receive the services you need, at the appropriate level you need and with appropriate level of effort required for your entity. Outsourcing allows you to create a team across levels, available on an as-needed basis, at the expertise level and cost point appropriate for the work. It may even save your company money.
– Outsourcing protects the organization in the event of staff turnover. Turnover in smaller organizations can be particularly painful. Often the person leaving is the only one with the institutional knowledge on how a specific business function is handled. The process of hiring and retraining can be a daunting tasks for many nonprofits. Outsourcing provides a buffer for that. An outsourcing firm will have other trained employees, who understand your business needs, are able to assess the current state of your business function and start the engagement with very little ramp up time. Additionally should a member of a client’s outsourcing team leave, the firm assumes the full cost and responsibility of replacing the staff member.
While outsourcing can be a great option, in our experience there are some keys to success that should be taken into consideration.
- Ask for referrals, identify the leaders in the field and perform your own due diligence. The right provider will prioritize client service above all else. All providers presumably have similar levels of technical expertise to support you but the best providers will improve your ability to focus on growing your organization. An outsourcing firm must be a good match for your organization and should improve your ability to focus on what really matters to you.
- Determine if you are ready to outsource. Some organizations struggle with whether they should outsource and when. In exploring this option, take into consideration your organization’s needs now and in the future. Outsourcing can provide the flexibility to easily scale up as a business grows. The outsourcing model often works best when the function is multi-layered or the needs are part-time.
- Be willing to invest in the relationship and see the outsourced team as an extension of your own staff. The most successful outsourcing relationships exist when the consultants operate as an extension of your team and integrate seamlessly as a part of your business. As outsourced staff, we often participate in client events, attend client staff meetings and in many cases have worked for a number of years with our clients as a trusted partner.
Outsourcing allows organizations to focus on growing their organization while leaving the business functions to trained professionals who possess both the industry experience and knowledge of best practices for growing organizations.
For more information on partnering with Insource Services or questions on working with an outsourcing firm, contact us at email@example.com or 781-235-1490.