by CFO Selections Team, on Feb 1, 2021
Effective outsourcing allows both large and small companies alike to lean on senior skillsets outside of the company to provide accurate information, offer impartial feedback, and inform strategic decision making. In fact, according to a recent Intuit study, 65% of business owners surveyed said they would be “better positioned for long-term growth if they could take a step back and look at the bigger picture.” These business owners also reported that they were involved in areas of the company such as sales, marketing, customer service, human resources, and accounting, instead of outsourcing them. It is no coincidence that these activities were taking away from their ability to focus on their core business functions. When they were asked what they should be spending their time on instead, their top answers included developing business strategy, making an impact on customers directly, and innovating product/service offerings. Business process outsourcing allows business owners and CEOs to utilize highly experienced professionals without needing to hire internally, both managing costs and improving business agility. Furthermore, outsourcing allows business leaders to reduce stress, lessening the likelihood of executive burnout.
Business process outsourcing (BPO) allows CEOs to focus on the job of running the entire business instead of getting bogged down with the management of individual departments and teams.
Do you like delegating? If you answered no, you are not alone.
According to Intuit, 96% of business leaders surveyed indicated they are reluctant to entrust others with tasks they are used to doing. This is often due to the misconception that no one else is as qualified as they are to perform these tasks. And while that may be true inside a given organization, business outsourcing gives CEOs access to a swath of qualified professionals to do the work on their behalf regardless of the size of the company.
As our partners at The ASP Team explain,
“Outsourcing allows smaller businesses to act larger than they are, gaining access to some of the same expertise, networks, opportunities, and economies of scale that bigger companies typically have available to them. Outsourcing technical areas like accounting and IT gives these businesses access to that of bigger company’s in-house staff, allowing them to punch above their weight class.”
While some CEOs may be keener on outsourcing and others more averse to the idea in general, the success of outsourcing business functions will depend on the companies that an organization uses to do their work. Hiring a reputable company that employs skilled professionals is key to succeeding.
Outsourcing not only frees up a CEO’s to-do list but also their minds. According to a recent survey, 45% of business owners indicated a benefit of business process outsourcing (BPO) would be “less stress,” making it the top benefit cited among those surveyed.
Handing off duties reduces the risk of burnout, helping to move business leaders from a place of overwhelmed exhaustion to confident control. A CEO needs to have a balanced leadership approach to running the company to stay both physically and mentally healthy. Improved mental acuity and focus allows CEOs to keep the business moving forward with strategic growth plans.
Outsourcing allows a company to control costs, converting fixed costs into variable costs. The result is greater agility and improved cash flow.
Controlling labor costs reduces expenses, making the business more attractive to outside investors and increasing the likelihood of securing bank financing. It also frees up capital to be used in other areas of the business, fueling long-term growth. This cost savings is especially salient when it comes to senior leadership roles like a CFO. While these types of roles can be hired in-house, doing so carries a hefty price tag once you add up recruitment, screening, hiring, and onboarding costs for hiring a full-time CFO.
The ASP Team puts it simply when they say,
“Handling everything in-house drives up costs and reduces overall efficiency, pulling resources away from your core areas. Outsourcing complicated activities with many touchpoints, like third-party logistics, can improve efficiency enough to not only pay for the cost of doing so, but aid in generating revenue elsewhere.”
Businesses with fewer fixed costs are more agile, meaning that they are better prepared to respond to market downturns and capitalize on opportunities when available.
Highly experienced financial, IT, security, and HR firms are among the most valuable assets that a company can partner with to bolster its in-house functions. When specialized personnel needs arise, businesses can outsource these roles to bring in experienced professionals and get them onboarded quickly. Additionally, short-term, or project-based business needs can be filled with outsourced roles without incurring the expenses related to hiring in-house personnel or requiring the time investment to do so.
At CFO Selections we provide fractional, interim, and project focused CFOs. If you need to outsource your CFO role for a project or fractional position and take advantage of the benefits that a third-party CFO company can offer, please reach out to us here.
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Topics: Recruiting, Trends, Planning, Cash Flow, Leadership, Growth, Budgeting, Strategy
Topics: Recruiting Trends Planning Cash Flow Leadership Growth Budgeting Strategy
