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Outsourcing - a practical process

Outsourcing - a practical process
Richard Rowell
Written by Richard Rowell
Sunday, 31 August 2008 22:30

Okay, so you think that outsourcing may be a good option for your business. But where do you start.

Well the best starting point is to look at why a small business should outsource any of its activities. Outsourcing is a grand term which simply put means getting other businesses to provide products and services for you, normally where this can be completed more efficiently and economically than you can.

Every business outsources though they may not realise it. For example, when we buy electricity we are effectively outsourcing electricity production to the National Grid. Small businesses can not afford to produce electricity themselves - so outsourcing it as a non-core activity is an obvious way to save time and money.

Is it time you looked at what you are doing in your business and see if outsourcing may be appropriate. We recommend you carry out a 3 step appraisal

  1. A good way to start looking at what you do is to draw up a list of everything your business does - eg production, marketing, distribution, invoicing, credit control, etc
  2. Assess how important each activity is to your primary objectives which may be customers' decision to buy, and keep buying, from you.
  3. Consider how good your business is at each of the activities compared to an outsourcing company

 Depending on your conclusions consider the following:

    1. Keep doing your core activities since you are good at them and they are fundamental to your success
    2. Outsource the activities that you are not very good at which are not core to your business. You will probably save time and money by letting someone else help.
    3. Acquire the skills you need for the activities that are critical to your business which you do not have or are not particularly good at. 

    Typical processes that a small business could outsource

    IT functions and support - you can outsource most IT functions, from network management to project work and website development. You benefit from the latest technology and access to experts in their field without having to invest heavily in people, skills and equipment.

    Business processes and HR - outsourcing activities such as recruitment, payroll, employment law and secretarial services gives you access to specialist skills, but you only pay when you need to use them.

    Finance - you already outsource end of year accounting/auditing, so why not do the same with your entire accounting function, including bookkeeping and invoicing?

    Sales and marketing - many businesses use an agency to handle marketing activities

    Health and safety - outsourcing health and safety gives you access to consultants who can help you in complex compliance issues.

    For more information and guidance please contact us

    Richard Rowell

    Richard is the CEO of Dataplan Payroll Limited and is also responsible for the ideas and development of Dataplan's innovative technology solutions such as ePaysafe.

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