When you’re a small business owner, juggling a multitude of tasks is the norm. In fact, our own research uncovered that 71% of SME owners are covering multiple roles within the business. How do you move some of the work off of your desk without breaking your recruitment budget? The simple answer could be outsourcing.
Outsourcing non-core activities is an attractive option for expanding businesses, to offload niche or specialist services that could be better managed by third parties. For SMEs, this could be things like marketing and PR, a personal (virtual) assistant, project management and even HR itself. Outsourcing these activities to a third party can allow you to purchase only the amount of support you can afford, rather than having to find a way to pay for several full time employees.
Whilst outsourcing is typically considered a money-saving activity, the reality might be very different. Specialist services from third parties can be priced slightly higher than what it might cost to maintain equivalent qualified, experienced employees to deliver the same service. The logic of accepting a slightly higher cost versus managing the service in-house might be the opportunity to avoid expensive and time consuming recruitment and the commitment of long term employment contracts.
The Chartered Institute of Purchasing and Supply (CIPS) takes the view that procurement or supply chain professionals should lead outsourcing activities, with expertly drafted contracts of a longer term duration to allow time for appropriate return on investment.
If you’re ready to outsource, how can you get started? The Chartered Institute of Purchasing and Supply (CIPS) takes the view that procurement or supply chain professionals should lead outsourcing activities, with expertly drafted contracts of a longer term duration to allow time for appropriate return on investment. CIPS also believes that innovation should be a key aspect of outsourcing along with the allocation of risks associated with the service. If you don’t have a procurement specialist on staff, hiring one as a consultant might be your best first step.
If saving cash is the driver behind an outsourcing activity, a thorough analysis of business requirements and the abilities of multiple market providers is required. A procurement professional can help guide you through the process of making a short list, requesting information and conducting interviews (or you can check out this ultimate procurement checklist for an overview if you don’t have a specialist to hand). The interview process should be followed up with site visits to meet the individuals who will not only be responsible, but also those who will be providing the service. This will help ensure effective delivery of quality services at the right price.
Innovation should be a key aspect of outsourcing along with the allocation of risks associated with the service.
Once you’ve selected someone, it’s very important that regular reviews take place to check the objectives of the outsourced activity are being met and that the business maintains an element of control to ensure the service still meets changing business needs – all things that can be ensured by negotiating the perfect contract.
Outsourcing is certainly a solution that SME owners should consider as a means of cutting down on their workload. It offers the potential to benefit from the guidance of professionals on from the latest techniques or methodologies, without long term commitment. If you’re looking to shift challenging yet non-core issues off of your desk, outsourcing is a great place to start.