MANY large corporate businesses are reducing risk, costs and improving their bottom line profitability through outsourcing certain back office business processes.

There is, however, still scepticism whether the value of outsourcing can be transferred to the SME marketplace.

The common perception is that outsourcing can only achieve the desired cost savings when placed offshore, with the net effect of a loss of control and, ultimately, job cuts.

In reality, there are many local, UK based options available for the SME market, which add true value.

Also there are numerous advantages that can be attained through a successful outsourcing relationship.

Experience: Outsourcing can give businesses access to the very best range of skills and experience that they would not be realistically able to afford on a full time employment basis.

Focus: Research shows that many directors of SME businesses spend too much time ‘running’ their businesses rather than ‘doing’ the things that the business was set up for.

An outsourcing partner will constantly review and revise service level agreements and key performance indicators for the business process which will bring a greater sense of control and focus to the business owner.

Cost: Not all the cost savings generated through outsourcing are due to cheap overseas labour rates. Economies of scale and faster, more efficient communications ensure that a UK based outsourcing business can still offer access to specialists at a cheaper rate than the business could employ them for.

Any ‘non core’ business processes can be outsourced once you have identified and measured quantifiable value via an outsourced solution.

Back office functions e.g. Finance, HR, IT, PR etc all tend to be fairly labour intensive and require differing levels of skills, so offer the lowest risk and quickest speed of implementation, lending themselves more readily to be outsourced.

However, you must be clear about why you want to outsource and set clear objectives for where you want the business to go.

Recognising the business goals at the outset will be a deciding factor as to whether it’s right to outsource all, part or indeed none of your back office processes.

Selecting the partner that will fit with your end goal is essential, i.e. if the plan is to set up in the UK and then expand into Europe, then firms with a European network which can expand as you expand your business will be the starting point.

Managing outsourcing relationships is time consuming and so the more services that an outsourcer can manage together, the more control and benefits you will get from the relationship.

A single point of contact will ensure that you don’t take action in one area without due consideration being given to the impact on another.

For further information please contact Neil Butler, Outsourcing Manager on 0191 511 5116