Saving money is among the most compelling motivations that make outsourcing non-core processes like compliance and payroll an attractive solution for SMEs.The accent is on saving on time and expenses to stay competitive in the SME space. But process outsourcing comes with its own fees. So how does the saving factor come in?
Let’s consider the costs of setting up your own payroll process, as an example. There are several factors involved, all of which incur their share of expenditure:
- Cost of software
- Cost of infrastructure acquisition/upgrade to run software
- Cost of regular updates
- Cost of hiring a skilled asset to operate software and carry out all related tasks including direct debits, generating reports
This can be a considerable cost, and one that does not directly generate profitability for your business.
Compare this with outsourcing your process to a company that has already made all these investments and is monetizing them via multiple projects.
Instead of incurring all these costs on your own, it’s like spreading the costs across your outsourcing vendor’s clientele. And, since this particular process area is a special area of focus for the partner, you can be assured that they will upgrade their infrastructure and skillsets on a regular basis – something that might be difficult for you to since you have to focus mindspace on your own core business.
Essentially, you’re just paying for the expertise and infrastructure that has already been accrued to be implemented on your behalf. This can easily deliver savings of as much as 80% compared to the huge shopping-list that comes with an in-house process. If you’d like to see what kind of savings you can get when you outsource your payroll or compliance, contact us right away!
When explaining the outsourcing concept to potential clients, we get asked certain questions time and again. In an attempt to help clear up some misconceptions around the process and help you decide if outsourcing is the right answer for you, here are some of the most common questions, and their answers.
- How can I be sure of sharing my confidential information?First of all, any good outsourcing company will sign a comprehensive Non Disclosure Agreement before entering into a project. This is a legally binding document. Just as important, an outsourcing company’s repute and business depend on their reliability and confidentiality. It would only hurt their business in the long run, were they to violate your trust.
- Will the resources working on my project also be working on other projects?Depending on the man hours required for the project, we will most likely assign resources exclusively to specific projects. You may also specify the same.
- Won’t I be better off with a big name?There are two aspects to this: economy and commitment. When you are running an SME, you need to control costs. When you engage a big name, you are paying a rate that is competitive against the rates companies with much higher buying power can command. A smaller, focused firm like ours can offer you better value for money. Furthermore, with a smaller firm you can interact with everyone involved on a one-on-one basis and be sure of their commitment to your project.
- Isn’t outsourcing only for big companies?If anything, business process outsourcing can be even more of a boon for an SME. It allows you to free up time and resources to focus on your core business. Getting the most out of each rupee you spend is a priority, and with outsourced non-core processes you save on investing in specialized resources that are not connected with your main area of business.
- We don’t have time to get into outsourcing, so it is not a big priority.This is precisely why outsourcing is the right solution for you. You need to be able focus on what’s most important to you – and outsourcing non-core functions frees you to do this while being assured that these processes are being carried on in an efficient, transparent manner.