Business process outsourcing: Could it help my small business?
No longer just for big businesses, outsourcing could help you run your start-up more efficiently and save you money in the long run. Find out more here
The banks are at it, the airlines are at it and even the breweries are at it – some of the largest multinationals have announced the outsourcing of business support roles, known as business process outsourcing (BPO) in the last year, including Lloyds and HSBC, British Airways and Carlsberg.
Often seen as the reserve of larger businesses, outsourcing is becoming more accessible to small firms with the advance of cloud technology, making data instantly accessible, transferable and easier to update by internal employees or outsourced consultants wherever they are in the world, at any time.
Outsourcing for efficiency
And it's not surprising it's becoming more common. Outsourcing can help ensure your business is as efficient as possible. Think about hiring a full-time member of staff that is not fully utilised during the working week and trying to do a bit of HR, IT, accounting and marketing. There is unproductive time, wasted time and not necessarily enough work to warrant a full-time employee. They may be highly skilled in IT, but less so in other business support areas.
But what is the alternative?
Small businesses can outsource business support functions to external outsourcing consultants and effectively “purchase” a few hours of time a day, a week or a month from an experienced professional as required to suit the business’ needs. There is therefore no need to hire a full-time employee if you don’t require a full-time position.
Cost saving benefits of outsourcing
Outsourcing can benefit your business via cost savings on infrastructure and technology, providing skilled professional resources, cutting payroll costs and increasing efficiency.
With cloud technology allowing access to business systems from anywhere, consultants do not need to work at your business premises, are instantly available and can cover sickness, holidays or urgent client demands on a short term basis or provide more sustained daily, weekly or monthly support.
Cost savings are threefold:
- The initial saving is on salary – buying hourly services from an outsourcing consultant rather than paying a full-time employee is an immediate cost benefit.
- Additional savings are made on associated direct employment costs such as employer national insurance, pension contributions, employee insurance and benefits provided.
- Savings are made via indirect employee costs such as utilities, rental, usage of facilities, and other administrative costs.
It is estimated that when taking the above into consideration, it can cost as much as 1.7 times an employee’s gross salary to employ them.
What services can I outsource?
Typically, bookkeeping, accounting, human resources, IT and marketing can be outsourced using a wide range of ever developing apps and platforms. Expensify and Receipt Bank allow for data input into bookkeeping and accounting platforms such as Sage and Xero can help you keep on top of your finances. PeopleHR provides cloud HR assistance and Leap can assist with practice management, for example.
While it's possible to engage directly with these platforms – if you want to focus on running and building your business and bringing cash in, outsourcing agencies (such as Ascentant) can take the pressure off, by providing consultancy, helping to implement systems and providing back office outsourced support as and when required.