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That is the question almost every business asks at one point or another: Should we outsource some of our operations? If the answer is yes, the next question is likely to be which services to outsource.
In a recent Elance survey of more than 800 US businesses, three out of four respondents answered yes to the first question. Fully 78 percent of participants were outsourcing key services to save money and access talent and infrastructure not available in-house.
Regarding the second question, one recent survey concludes that the top four outsourced services are human resources, public relations, virtual assistants and manufacturing. But what’s right for these businesses might not be right for yours.
Before you outsource any business processes, carefully assess the costs and benefits of doing so and ask yourself some key questions: will outsourcing save money? Will it improve business performance? Will it allow employees to focus more of energy on core business processes?
That said, here are three operations which might make sense for your business to outsource.
Payroll
Especially for small businesses, processing payroll in-house can be complicated and time-consuming. In addition to writing paychecks, you have to file quarterly reports, issue W-2 forms, calculate contributions to health and pension plans and keep up with frequent changes in the tax law. Unless you or one of your employees has a strong accounting background, outsourcing payroll can ensure this work is accurate and avoid potential problems with the IRS.
Marketing/Public Relations
The days are gone when marketing meant posting ads in the yellow pages and local PennySaver. Effectively marketing your business now means having a current website and optimizing it for search engines, launching email campaigns and effectively leveraging social media. On average, small businesses spend more than 10 percent of revenue on their marketing efforts, and much of that money is wasted on marketing that doesn’t pan out. To ensure your marketing dollars are spent effectively, you should consider outsourcing to a competent marketing or PR firm.
Web Hosting
Using in-house servers to host your website has your IT staff dealing with downtime issues and hardware upgrades instead of focusing on more mission-critical projects. It’s also expensive to maintain and upgrade hardware and software. Outsourcing to a reputable managed-hosting provider can reduce downtime, provide critical support when you need it, ensure you have the latest technology and reduce costs.
Outsourcing won’t solve all of your problems, nor is it right for every business. There is a downside to giving up some control over key operations. Before deciding to outsource, work closely with your in-house talent to determine if the benefits of outsourcing outweigh its risks and to identify competent providers.
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