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Why Outsource?

Why outsource?

Outsourcing isn’t just about cost savings…

So let’s first consider a company’s structure:

Top Management/Premier Tier: Decision makers who ‘oversee’ the company.  As an example a CEO, FD or MD.

Secondary Tier:  In-house staff who are answerable to top management.  Essentially the major fee earners who provide the revenue stream on a day-to-day basis.

Third Tier:  Staff who provide ‘secondary functions’ to in-house staff; often overlooked.  Back-office workers, the worker bees in the hive!  Vital to the running of the business but in areas that are now being challenged by highly efficient, cost-effective ‘outsourcing providers’.

Fact: Over the last 20 years, since the internet started the secondary tier employees spend time on third tier functions: as an example PAs typing, EAs doing diary management, solicitors and other professionals doing their own typing.  The result however is not improved efficiencies but more a case of mismanagement.  After all the internet changed our lives forever.

Outsourcing is about optimising business processes: 

Warning to Management: Outsourcing is changing the rules of the game.  Your business needs to harness the opportunities, and conquer this fast moving evolution, or it will fall behind.

It’s about being smart and ultimately enabling in-house staff to provide more revenue.  Consider the following, all only possible since the internet became a regular feature of all of our lives:

IT outsourcing – the use of external service providers to effectively deliver an IT-enabled business process, application service and infrastructure solutions for business outcomes.  Common to most businesses these days.

Accounts outsourcing – the delivery of process-oriented services, accounts software and human resources to e-file company tax, VAT and staff payments evolving processes along with government regulations.  Again increasingly common.

PA/EA Services – this may be the most diverse area for outsourcing.  Diary management, typing, client liaison, telephony – the variety of roles are often fluid and not ‘set in stone’.   The choice is often dependent on the type of company.  As an example an internet ‘order-only’ company that does not enable clients to ‘call’ them but insists they communicate ‘over the net’ does not need client liaison on the telephone.  Neither will it need diary management.  The opposite can be said of a medical practice or client-facing veterinary surgery.  This area is still unrecognised but has the most to offer.

The Reasons to Outsource:

According to the Outsourcing Institute’s Outsourcing Index 2000, there are many reasons why companies outsource. Here are some of the top reasons:

  1. Improve company focus. It is neither practical, nor possible to be a jack of all trades. Outsourcing lets you focus on your core competencies while another company focuses on theirs.
  2. Gain access to exceptional capabilities. Your return on investment is so much greater when you outsource to a firm that specialises in the areas you need. Instead of just the knowledge of one person, you benefit from the collective experience of a team.
  3. Reduce and control operating costs. When you outsource, you eliminate the costs associated with hiring an employee, such as recruitment costs, paid holiday and illness leave, office space and commuter hard and software.

The Optimisation Process Results:

Avoids Costly Temporary Staff. Working as a team means that on occasion roles overlap.  Someone is away ill.  A team member takes up the slack.  This means their work gets put on the back-burner [so ironically this can be as expensive as employing a temp!].  But what if you could have an outsource partner who could step in and provide the service as and when a situation like this arises?  An obvious example is typing.  PAs and EAs often still type, the cost of which is substantial.

Examples:

A secretary on say £30,000, working out of a large UK city such as Manchester, Birmingham or London, in effect may be costing anything between £54,000-£69,000.  Broken down their cost per hour may be between £41 to £56 an hour.  However if they say spend 30% of their time typing the maths speak for themselves since an outsourced typing provider will cost approximately £18 an hour, can be used as and when required and is entirely flexible to client needs.

Looking at it in another way: A Grade A Solicitor (at £409 per hour) who spends two hours typing their own documents/emails could lose their firm up to £497 in chargeable time (as opposed to dictating and using an outsourced provider)? A Grade D lawyer (at £138 per hour) could lose their firm up to £136.

In both of the above examples it makes no sense for typing to cost that much.  Why not do the maths?

The True Cost of an Employee

OutSec Services Ltd, in association with Stanbridge Associates, a leading UK accountancy firm, have worked together to provide a useful took in the form of a Cost Calculator.  Spend three minutes and see for yourself the cost of your typing.  It will change your mindset – I guarantee it!

Make Capital Funds Available. By outsourcing non-core business functions, you reduce costs.  Then spend the capital on items directly related to your product or your customers.  A no-brainer; savings provide more resources to be employed for better use.  Minimising internal staff who concentrate on core business optimisation means funds can be spent on R&D, product manufacture, advertising and marketing; all key elements to successful company growth.  In addition space can be provided for additional fee-earner activities.

Frees Internal Resources for Other Purposes

Reduce Risk. Keeping up with technology required to run your business is expensive and time consuming. Because professional outsourced providers work with multiple clients and need to keep up on industry best practices, they typically know what works and what does not. This kind of knowledge is invaluable and far more efficient than paying for internal staff to work on this.

Ask yourself:

What percentage of time do you want your in-house staff to undergo continuous professional development?  To any accountant the answer would be ‘as little as possible’.

The true answer is that by outsourcing to experts who work day-in and day-out with multiple clients whilst also having their own R&D departments, THEY will provide you with a thorough understanding of the current developments in the market.  Pooled knowledge is cheaper and of more value; again obvious.

Outsourcing is about using knowledge in the most efficient way whilst also offering cost savings!  Why aren’t you doing more of it?!

About OutSec The UK’s Leading Online Transcription Company

OutSec is the UK’s leading online transcription company whose business has grown substantially since 2002. We are one of the most successful transcription companies in the United Kingdom.

OutSec are both ISO 27001 and Cyber Essentials certified.

If information, data security and confidentiality is important to you, do not just cross your fingers when outsourcing transcription to meet your typing needs.

Therefore, if you are agreeing a contract which deals with sensitive data, demand ISO 27001 and Cyber Essentials compliance.  They are more than logos! These information security standards set the bar high.  It takes constant review, challenge and action to receive and retain them. They also provide assurances that OutSec are indeed GDPR compliant.

OutSec provides secure outsourced transcription services to the medical, legal, property and surveying, media and interviews, inventories, financial, commercial, HR, recruitment and Executive Search sectors.

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Clients Include:

Here are just a few of our valued clients:

Translate Media University of Salford Strutt & Parker Allied Surveyors & Valuers Carter Jonas Yorkshire Surveyors Bidwells Innes Associates Gregorys