Services outsourcing: which functions to outsource and when it pays off

In our meetings with companies, outsourcing is hardly ever the starting point. What comes up is a symptom: “Accounts are always behind”, “We can't get round to all our customers”, “I need someone in admin, but not full time”. Behind many of those remarks there's no hiring problem. There's an organisational one. And sometimes the best answer isn't to hire, but to outsource.

In this guide I explain what services outsourcing means as we understand it at Crearte, which functions make sense to outsource, when it pays off and when it doesn't.

What services outsourcing is

Our definition is simple: we take on functions or services for a company, supplying specialist professionals who carry them out on behalf of Crearte Consulting.

The key idea is at the end of that sentence: “on behalf of Crearte Consulting”. The person doing the work does not join your payroll. You define what you need and the result you expect. We supply the professional and make sure the service works.

That is a fundamental difference from recruitment. In recruitment we look for someone who joins your company. In outsourcing, what you contract is a service.

Which functions can be outsourced

These are the functions we take on for our clients:

• Secretarial support: diary management, document management and executive support.
• Administration: invoicing, supplier management and recurring administrative tasks.
• Accounting: bookkeeping, period-end closes and reconciliations.
• Controlling: budget monitoring, management reports and variance analysis.
• Sales: sales professionals to open up a market or strengthen a business line.
• Customer service: handling enquiries, incidents and follow-up.
• Marketing: running campaigns, content and channel management.
• Technical support: user support and incident resolution.

What they have in common: they are necessary functions, with tasks that can be clearly defined and results that can be measured. In most companies they aren't the core of the business, but when they fail, it shows everywhere.

When outsourcing pays off

There's no universal rule, but there are clear signs. Outsourcing usually makes sense in any of these situations.

The workload doesn't justify a dedicated role

You need controlling, but not forty hours a week. Hiring a specialist part time is hard: good professionals rarely look for that. Outsourcing gives you access to the right profile in the measure you need it.

You need flexibility

A campaign, a seasonal peak, the launch of a business line. If you don't know how long the need will last or how much it will grow, an external structure adapts better than permanent headcount.

You want your team to focus on what matters

When the management team spends hours on admin tasks, that cost doesn't appear on any invoice, but it's real. Outsourcing those tasks frees up time for what only your team can do.

You have nobody to manage the function

Hiring someone also means managing them, training them and covering their absences. If you have nobody in-house who knows how to supervise that function, outsourcing hands that management to people who do.

When it doesn't pay off

There are also situations where outsourcing isn't a good idea, and it's worth saying so:

• When the function is your competitive advantage. If the way you sell or serve customers is what sets you apart, you'll probably want that knowledge in-house.
• When the need is stable, broad and strategic. If the function will grow with you for years and is part of your culture, an in-house hire usually fits better.
• When you can't define the result. If you don't know what you expect from the service, no provider can deliver it.
• When what you need is temporary leadership. If the problem is leading a change or a project for a few months, the right fit is interim management, not outsourcing.

How to tell whether it pays off for you

We won't give you a figure, because it depends on your company. But you can make the comparison with your own data. In one column, put what it costs to keep the function in-house: salary, social security contributions, recruitment time, training, workspace, tools, supervision hours and the cost of covering absences or turnover. In another, the cost of the outsourced service. Then add what isn't money: flexibility, speed to get started and the time your team gets back.

If the comparison is close, flexibility usually tips the balance. If it comes out clearly in favour of keeping it in-house, hire. And if you'd like to know the terms of our service, we'll explain them in the meeting.

How to set up outsourcing that works

Most problems with an outsourced service don't come from the provider but from a poorly planned start. Before you begin, be clear on these points:

1. What's in and what's out. Make a list of specific tasks. Anything not written down ends up as a point of dispute.
2. How it's measured. Define a few indicators that can be checked: closing deadlines, response times, incidents resolved, reports delivered.
3. Who the contact is. There should be one person in your company who knows the service and another at the provider who answers for it.
4. How information is shared. Access, tools, documentation and confidentiality. Better to sort it out on day one than in the middle of a period-end close.
5. When it's reviewed. Set an early first review point to adjust whatever is needed, followed by regular reviews.

With this in place, the start is faster and the relationship rests on results, not impressions. It also lets you make an informed comparison if you ever decide to bring the function back in-house.

A legal note

Outsourcing a service is not the same as supplying workers, and the difference has employment law consequences. As general guidance: the provider must organise and direct the work of its professionals, and the agreement must describe a service, not a person placed at your disposal. Before signing, check with an employment lawyer or adviser how the agreement fits your case.

How we do it at Crearte

We start by understanding the function: which tasks it includes, what result you expect, how it's measured and how it fits with your team. Then we identify the right professional using the same method we use in recruitment: competency matching with STAR and CAR interviews and critical incident analysis, backed by our own database of 47,000 analysed and up-to-date candidates. All with senior consultants and complete transparency on how the service is progressing.

If you're still unsure whether to outsource, hire or bring someone in temporarily, the guide on which service you need in each case will help.

Frequently asked questions