In today’s “gig economy,” it seems that just about everything can be outsourced to a human, a software platform, or a robot. So how do you know when your business needs assistance from an outside party to achieve maximum efficiency? There are a few simple steps to finding the answer.
Like an ecosystem, an efficient outsourcing structure includes a flow of skilled organisms working together to bring energy to your business and to the companies with which you partner.
Observe the Landscape
The first step is to understand the pros and cons of outsourcing. On the plus side, you can reduce labor costs, tap into expert knowledge to bridge talent gaps on your team, and free up your time on day-to-day tasks so that you can do what you love and keep building your business. However, on the flip side, you may lose some control over project management, you could encounter slow response times due to time zones, or privacy and intellectual property concerns could arise.
You can refine the landscape even further to define if outsourcing is a necessity or a strategy for your business. It can often be both. For example, many small to medium-sized companies struggled with understanding and unraveling new plans and policies such as the Paycheck Protection Program and the CARES Act. Utilizing Human Resources experts who have the depth of knowledge to manage these types of policy changes can free up you and your team to continue focusing on revenue-generating activities.
Agility is imperative for Pacific Crest Group client-partner Ben Davis, founder and CEO of Illuminate, a non-profit located in the Bay area. Davis comments, “We are an intentionally small organization with monumental scale projects. Outsourcing allows us to stay small and tight and gives us the flexibility to be nimble without extreme overhead. It’s liberating.”
Ask yourself and your team:
• Will this help us control costs?
• Will this make us more efficient and effective?
• Will this save time?
• Will this improve our competitive edge?
• Will this reduce our overall risk?
• Will this help us advance our mission?
Unearth Where You Need Help
Typical tasks to outsource include finance and accounting, Human Resources, customer service, technical support work, web development, and marketing such as blogs, presentations, email communications, and social media.
Take a look at the organization chart for your company. Create a list of the roles and associated tasks for each position and determine the gaps and areas of overload in your processes, systems, or efficiencies. Also, look at what it will “cost” your team to onboard a new external vendor.
A few tips before you begin:
• Are you clear about the task or project to be outsourced?
• What is the cost/budget of the project (is it billed by the hour or by the project?)
• What are the skills required to manage this project?
• What are the technical and human resources required for this project?
• Who on your team will be managing the outsource contractor or outsource firm?
• What are your deadlines and performance expectations?
If you have chosen to outsource a task that is likely to be repeated, can the initial outsource contractor prepare a step-by-step “manual” of how to complete this task? If so, you now have a resource you can use in the future, either as part of an operations manual or as a time-saving tool to pass on to another outsource contractor in the event your initial contractor does not work out.
Build Your Ecosystem
A successful business leader views outsourcing as a strategic tool and a valuable component of their overall operation. Partnering with the right service provider is critical – remember that ultimately, they work for you. You can hire a highly specialized vendor who knows one skill very well, or you can contract with a firm that offers a broad range of services. Pay attention to how well a potential contractor understands your business. Can they customize their operations to fit your business? Are they flexible and collaborative? Are they a good cultural fit?
Pacific Crest Group’s co-founder Franka Winchester shares, “As a company that provides outsourcing options, we also outsource to keep our accounting functions completed on time every week. It’s smooth, efficient, and accurate. Outsourcing allows me to focus my energy and time on culture and growth and know our operational processes are running smoothly.”
The ray of sunlight on the horizon is that most often, outsourcing ends up fostering creativity and morale on your team, energizing strategic tasks, and creating time to develop talent within your team to generate results. As a bonus, outsourcing critical areas of your business is also healthy for continuity and resilience. With the right partnership testing your systems and efficiencies, your outsourcing arrangement will be able to handle any change in the environment that might cause an interruption to business.
To find the right balance with your business ecosystem, contact Pacific Crest Group to learn how our accounting and Human Resources consultants can assist you in refocusing on the core business activities you love.