STRATEGIC OUTSOURCING

Structuring a Business for Tomorrow’s Economy

Chris Cracknell Chris Cracknell

As markets grow ever more advanced and complex, businesses in all industries will need to remain nimble in order to adapt to new technologies and quickly changing conditions. The corporate powerhouse of tomorrow may well be a group of young ambitious innovators who are working from their laptops today.

We’ve seen this type of disruptive growth happens so many times, but what is it that separates the big winners from everybody else? And more importantly, what strategy is proving to be most effective in this current climate of rapid digital transformation?

To answer this question, we might take a page from recent success stories, which have proven time and again that old-fashioned business models are on the way out. Uber became the world’s largest taxi company without owning any vehicles. AirBnB performed the same feat with accommodation; Facebook with media; Alibaba with inventory. Brick and mortar may be solid to the touch, offering a sense of reality and permanence – but in many cases, this impression is misleading. Trends all point toward the digital world as the true realm for long-lasting growth, leaving behind those who fail to adapt.

Although these examples all relate to business models, we can apply the same lesson to business structures themselves. A company may ‘feel’ more complete when it has its own accounting, admin, HR, and marketing departments – and indeed, many (mostly larger) businesses do well under this format. But for most SMEs, these sizable sections of the company add no value to the product or to the consumer experience. On the contrary: They divert time, effort and attention away from the activities that generate actual profit for the business.

Setting up permanent administrative areas of the company represents a long-term investment at exactly the time when – for most such companies – they should be focusing entirely on building their product, brand, and customer/client interface from the inside out. Timely production and innovation are difficult enough when management doesn’t also need to spend its resources on interviewing and training candidates (for positions the management itself has little knowledge about) for non-core company activities. There is a reason, after all, why businesses keep going back to the old saying: ‘Do what you do best, and outsource the rest.’

 

Towards a sensible allocation of resources

It is easier to be successful at one endeavour than to expect success in several of them at the same time. Businesses that try to do everything in-house often end up spending the bulk of their time putting out fires in areas of the company that they would prefer not to deal with at all. By choosing instead to leave those areas to established and reputable service providers, management can eliminate the distractions and the worry, and focus their entire team on the core tasks at hand.

Moreover, the digital innovations that have been taking place elsewhere across the economy have also come to accounting, HR, and other administrative work. Professional service providers take full advantage of advances in software and AI, offering their clients the power of data analytics and accurate performance at high speed. The result is higher quality output and comprehensive analysis, all performed much more quickly than a small in-house operation could offer.

This type of integrated approach adds insight and reliability to admin projects, and tends to be cheaper than using valuable office space to hire full-time employees tasked with doing similar work. Most importantly, though, it frees up your team to invent, improve, and refine its central offerings, while focusing its remaining time and attention on giving its customers the best experience possible.

Many talented innovators start their own business with the highest of hopes, only to find themselves quickly bogged down and sidetracked by tasks they never imagined needing to do. Through strategic outsourcing, accompanied by the advice of experienced business consultants, they can finally get back to the job of adding value where it is needed most.