The True Value of Outsourcing for Growing Organizations

After several years of frustration as the CFO of a mid-sized R&D company, managing what should have been a service-oriented function but was more often a roadblock, I was convinced there had to be a better way. So, in 1993 I started Insource Services. Initially conceived as a financial outsourcing firm, with the goal of providing accounting services that were customized to clients’ needs, Insource has grown to a managed services company that provides the full array of services needed to run a business. Today we provide high-level accounting, human resource and technology consulting services to our clients. At the core of what we do is providing fully outsourced coverage, now often referred to as “managed services”. I’d like to share what I’ve learned over the years about the true value of outsourcing.

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 solid accounting, HR and IT support. Often, the situation we encounter is that executive staff are attempting to simultaneously manage their leadership role while also handling the essential supporting business functions. Or, they may have staff that are inexperienced in dealing with some of the higher-level issues that have arisen as the company grew. For this reason outsourcing with a trusted or referred resource can be a good option.

Others also may 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 Staff Accountant. You have the ability to receive the appropriate experience level of personnel and services you require, at the 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. While the cost will likely be similar to internal staffing, the level of service you receive will far exceed what you could get from staffing internally.
• Outsourcing removes the problems inherent in internal 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, and the process of hiring and retraining can be daunting. Outsourcing eliminates that problem. 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 and training 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 questions on working with an outsourcing firm, or for more information on partnering with Insource Services, please reach out to us at 781-235-1490, or email us at insource@insourceservices.com.

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