The Outsourcing Card | In the tech age, farming out functions becomes crucial
When Jim Pond and a couple of partners sat down in 2007 to start a new company, they quickly decided that they weren’t going to be doing every aspect of the business themselves.
“We said ‘How are we going to focus on what adds value to what we do for our clients? How do we not do anything else?’ ” Pond recalls.
Today, Pond’s marketing and technology services firm, Get Compassed in Leominster, is at the forefront of a growing trend. Increasingly, companies are defying the old wisdom that if you want something done right you have to do it yourself. Instead, they’re finding that to get something outside of their core business done right, and affordably, they often need to hire someone else.
Pond said Get Compassed outsources its payroll, accounting and production management functions to different companies. Using a vendor’s cloud-based software, he said, he can manage payroll from his iPhone in three minutes, so he has more time to focus on the things that bring in revenue.
Chris Tankis, vice president of business development at PC-Plus Technologies in Auburn, said that’s a big reason clients hire his company to take care of their IT needs.
“Mainly they want to focus on their business and not be as focused on IT,” he said. “What they’re finding is, with all this technology, it’s getting more advanced.”
Tankis said it can be too expensive for a small or mid-sized company to hire people with the expertise to run a computer system. Outsourcing allows clients to use only the resources they actually need. An IT company has employees with varying levels of expertise, so everything doesn’t need to go through someone with extensive technical knowledge.
A Help To Small Businesses?
For small businesses especially, Tankis said, handling IT is just too much effort.
For lack of a better word, it’s a thorn in their side,” he said.
On the other hand, for companies that need to specialize their IT systems, outsourcing can cost more than it’s worth. Bryan Poist, chief financial officer at Hudson office furniture maker AIS, said the company brought its IT in-house a few years ago, going from two technology specialists to eight.
“It definitely saved us quite a bit of money over the long term,” Poist said.
He said outsourcing might have made sense if the company used a “canned database,” but because AIS strives to be a lean company, it has to customize its technological systems: things like forklifts that read barcodes as they move products around and feed data into a central system that keeps track of customers’ orders.
“We need the technical expertise on site in order to handle that,” he said.
At the same time, Poist said AIS is still open to using outsourcing when it makes sense. It runs its payroll through the big outsourcing firm in that area, ADP.
HR Functions Become A Target
Ultan Feighery, owner of The Human Resources Organization in Westborough, said many companies find that outsourcing various HR functions lets them pay for only the expertise they need. They “don’t want people making $150,000 doing basic function work half the time,” he said.
Feighery said there are other economies of scale involved in outsourcing too. His firm can keep secure systems for storing employee data, freeing clients up from keeping track of new regulations and best practices in the field.
Elizabeth Higgins, president of Marlborough pharmaceutical quality control firm GlycoSolutions, said her company has been getting more business from pharmaceutical companies that don’t want to employ people to do the lab work she does.
“I think that’s going to be the continuing trend,” she said. “All you have to do is look at the layoffs at pharmaceutical companies.”
Higgins said many start-up companies in the field don’t have their own labs because it costs too much to maintain them.
“The little guys can’t raise any money, and the big guys are trying to save it,” she said.
Kris Canekeratne, CEO of Westborough-based IT consulting and outsourcing firm Virtusa Corp., said cloud computing is an especially important form of outsourcing for small companies. He said using software and systems that are located remotely can let startups do things that would have only been possible for large companies a few years ago.
“You can dramatically reduce the cost of entry by building consumer applications,” he said.
If outsourcing can be a way to handle routine tasks more efficiently, it can also be a tool to go beyond the scope that a company could handle on its own. Canekeratne said a big part of what Virtusa’s clients need is assistance reaching their customers on mobile devices. One example, he said, is how the company has helped banks introduce apps that let customers use their smartphones to virtually deposit their checks.
“It’s been extremely well received,” he said.
WBJ Web Partners
Most Recent
Most Recent
0 Comments