Don't Bother Tackling These 5 Business Functions Yourself
Every business involves tedious but indispensable tasks. Those are the ones it's best to outsource.
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Outsourcing isn't a new trend -- but what and why companies are outsourcing is changing.
In its 2018 Global Outsourcing Survey, Deloitte went so far as to describe traditional outsourcing, such as moving manufacturing overseas, as "dead." In its place, the report showed, "disruptive outsourcing" is on the rise.
What, exactly, is disruptive outsourcing? It's a form of business process outsourcing focused particularly on leap-forward operational innovations. Most companies that engage in disruptive outsourcing do so not to cut costs, which Deloitte reports was once the top reason for outsourcing, but to create a competitive advantage through organizational agility.
Demand for disruptive BPO services isn't slowing down, either. In a report released this past January, Market Research Future found that the global BPO market will grow 11 percent year-on-year until 2023 -- between three and four times as fast as the wider global economy. The best business functions for innovative outsourcing share something in common: They're tedious, but they're also musts in the modern economy. Outsource the following functions to spend more time on your company's core competency:
1. Payment processing
Everybody likes to get paid, but few people like doing the legwork of invoicing clients, hounding late payers and processing payments. But payment processing isn't just a pain: Tungsten Network research shows the average business wastes 6,500 hours per year, or more than $170,000, on inefficient payment practices.
Particularly if you cut paper checks or do business internationally, partnering with a payment processor like BAMFi can empower you to use technology to streamline collections. "By reaching further into the process, we find more opportunities for automation," BAMFi CEO Todd Ehrlich explains. "We can automate invoicing, for instance, using signals like automated proof of delivery."
2. Contractor payrolling
Contracting certain roles can save money, to be sure, but it can also create headaches of its own. Peter Limone, president of payrolling provider Innovative Employee Solutions, points out in a blog post that hiring contingent workers can complicate a company's payroll and compliance functions in multiple ways.
Say you've won a six-month federal contract. If you need to hire several temporary employees for the project, working with a payrolling provider ensures you won't be burdened with higher state unemployment taxes when it's time to let them go. Or, if you need to work with contractors in a state where you're not licensed to do business, payrolling them with a national provider allows you to get to work immediately without worrying about compliance.
Related: Entrepreneurs Find Hiring a Payroll Service Brings Perks
When it comes to technical hires, in particular, recruitment tends to be expensive and time-consuming. Although she acknowledges that the metric depends heavily on company size, number of hires and the roles in question, Workable CFO Lacey Brandt suggests aiming for an average cost per hire of $3,000 to $5,000.
To cut recruitment costs, turn to an AI-powered talent acquisition platform such as Stellares. Using natural language processing and deep learning models, the platform reads job descriptions, matches candidates with companies, pitches the opportunity to talent in a personalized way and introduces individuals who holistically fit the role. In 60 percent of cases, the company claims, corporate recruiters using the Stellares platform request to meet 60 percent of the talent it introduces.
Related: 3 Ways to Enhance Your Recruiting and Onboarding Processes to Set Your Startup up for Success
To new entrepreneurs, purchasing might sound like the easiest business function out there: How hard can it be to buy something? Most B2B transactions, however, represent hours' worth of communication, logistics and relationship-building. Without personalized interactions, for instance, about two-thirds of business buyers will look elsewhere.
Not only do group purchasing organizations like UNA take those time costs off entrepreneurs' shoulders, but they also save their members money, to the tune of 80 percent on office supplies and 15 to 20 percent on categories like shipping and cleaning equipment. "Almost anything a business could need, GPOs can get for a better price," CEO Anthony Clervi said. "Think printers, computers, company cars, desks, stationery, and even cleaning supplies."
5. Product innovation
Companies are increasingly looking outside their walls for something once seen as an internal must: product innovation. Perhaps counterintuitively, external firms often out-innovate companies' own product teams because disruptive innovation requires seeing problems with fresh eyes.
Although it's ideal to partner with an innovator in your own industry, those companies tend to go by another name: competitors. Instead, look for one with experience across multiple domains and types of technology. Digital innovation group Cie Digital Labs, for instance, has tackled everything from a national travel center's loyalty program to a national pool supplier's digital app.
Related: Why Product Innovation is the Key For Every Organization
No business is good at everything, but today's economy leaves little room for learning on the job. Rather than wrestle with tasks outside your core competency, stick to what you're best at and outsource the rest.