When running any business, some responsibilities can take more time than you have, or you realize expertise is required in areas you lack it. Outsourcing providers can help, providing specialization not otherwise available to a small or medium-sized business.
There are several scenarios where small to mid-sized businesses should consider business process outsourcing, or Business-Process-as-a-Service (BPaaS), to boost productivity and efficiency.
AcctTwo founder and CEO Marcus Wagner cites the scenario of an entrepreneur starting a software company to quickly grow the business in hopes of selling it in the not-too-distant future.
“While the business is still growing, it doesn’t make sense for the company to hire an accounting staff, an HR staff, or an IT staff, only to potentially have to let go of those staff in the event the company is acquired,” he says. “Instead, those HR, accounting, and IT business processes can be outsourced to teams with better expertise, better technology, and the ability to scale with the growth of the business.”
In the agriculture sector, or anywhere business performance is tied to fluctuating markets or seasonality, BPaaS allows companies to dial the size of these functional groups up or down depending on the time of year or the state of the industry.
“As commodity prices rise, instead of hiring more accounting, HR, or IT staff, agricultural businesses can simply pay for more processing of invoices, or payroll, or support tickets as their business booms,” Wagner says. “Or they can dial those services back as business slows, never having to go through the pain and cost of hiring and firing workers.”
Wes Higbee, president of Full City Tech Co., notes the number one reason to outsource any aspect of business is to leverage the expertise of others to accomplish even more for yourself.
“Executives need to resist—and teach others to resist—the not invented here (NIH) temptation,” he says. “Trust is absolutely essential in a productive outsourcing relationship. Patience is necessary to find the right partner. Never work with someone that requires you to babysit their people and processes. Find people that will have your back.”
One BPO area few business owners think about is finance: an entire finance department can be outsourced, from the bookkeeping all the way up to CFO duties. With careful planning, these jobs can be done much more efficiently.
“Fractional CFO services and business finance consultants are using various cloud-based and hosted accounting solutions to provide highly automated accounting and finance services,” says advisor to growth-oriented companies David Worrell, managing member of Fuse Financial Partners. “You save on the office overhead, the distraction, and the aggravation of accounting while getting better data and reports to support decision making. And if you can find one that also offers the high-level strategic help of an experienced CFO, you’ve got a really strong partner.”
For example, a firm providing outsourced accounting can build separate teams of accounts payable specialists, accounts receivable specialists, and general ledger specialists. Each team might work on all customer accounts, providing a level of expertise within each function that a business owner couldn’t hope to match if they had to hire a handful of accountants to manage their end-to-end accounting processes.
Evan Carmichael, leadership speaker and president of Evan Carmichael.com, notes BPO can provide significant cost savings for business owners, a significant benefit that can potentially allow you to hire a team of specialized people for the cost of one worker.
“But it also comes with significant potential risk,” he says. Questions to consider include: what happens when files are transferred over, and how secure are they? In communication roles, are there native English speakers? Will time zone differences impact your communication with them?
Before working with any outsourcing provider, ensure they use best-in-class technology. It needs to provide the right access and reporting for your management team to collaborate with the outsourcing team without losing visibility into the processes being outsourced.
Also, remain open to process changes. Wagner argues outsourcing providers are experts in their field, and may suggest changes that can help your business grow even faster and run more smoothly.
Saving money is always attractive. But an even bigger appeal of business process outsourcing is in its ability improve the quality of your service—and in a flexible way that scales (and contracts) quickly.
planning, efficiency, collaboration, business, productivity