Outsourcing: When is the right time?

By: Jason Ryan, CFP
May 1, 2019

A lot of companies have recently been turning to outsourcing firms to help manage and solve their business problems.

According to reports, the outsourcing market is expected to thrive in the next few years as more and more companies choose to outsource some of their services and get other firms to do the work for them. But why choose to outsource? How do you know when is the right time to outsource?

When it comes to outsourcing you must consider a few things:

First, as a business owner, your time is a valuable asset. Every hour you spend on something that could be outsourced is time you could be spending on accomplishing your business objectives. In short, your time is valuable and this needs to be recognised.

Doing this will help you quantify and measure your business’ performance, and the impact of outsourcing. You have to first track the time you spend on something to know what it costs your business. What may take you a couple hours each week might take a trained professional or trustworthy software significantly less time.

It’s going to be hard to see the benefits of outsourcing if you don’t first look at your hours as a tangible cost.
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Second, as you get busier and your business grows, you’ll have to decide where to focus your energy. The greatest contribution a business owner can provide their company is to look ahead and spend time on what’s going to move the needle. For most businesses, payroll isn’t one of those things. The exception being, of course, if you’re a payroll company.

These two points align with a 2016 Deloitte global outsourcing survey, which found the primary reasons why a business will outsource—to cut costs, and to focus on core business objectives. With this in mind, you’d know if it’s the right time to outsource when you start noticing these trends:

1. Tasks become too time-consuming.

When a small task becomes a huge time-killer, it’s time to consider outsourcing it. Scaling a business successfully means maintaining or improving operations as you go. Processes should get easier and more streamlined, not the other way around;

2. Some responsibilities are pulling away resources from higher priorities.

This is an easy one to measure. If something isn’t directly contributing to your bottom line, you can consider outsourcing it. Especially if that thing is keeping you from other tasks that do impact the business in a meaningful way; and

3. There’s a more cost-effective way to get things done.

There’s an app for everything. If you feel like technology can alleviate the time-consuming burden of business operations, you’re probably right. If you need a hand, you might want to check out some of the best online tools for productive teams.

The right time to outsource

If you’ve hit one of these trends, then it’s probably the right time to outsource. Outsourcing will not only help you have more time to focus on growing your business and working towards reaching your objectives, it will also give you more time to spend outside your business. So why not outsource now?

Jason Ryan, CFP

Jason is the Global Head of Sales and Marketing of DBA. He has over 20 years of experience working with some of the largest financial institutions in Australia. He is a Certified Financia Planner and an SMSF Specialist, with a bachelor’s degree in Accounting from Victoria University.