Is Outsourcing Right For You? Part 1 of a 3 part series
Often understaffed and underfunded, charitable organizations put in long hours to accomplish their mission. A point that many of you can attest to, as the vast majority of our readers are involved either directly or indirectly with the nonprofit community. You know better than most that charitable organizations are often stretched to their limit. That time is precious, and there never seems to be enough of it.
Outsourcing can be a real solution for your time deficiencies. By outsourcing some of your specialized operations you can free up some of your time, allowing you to devote more to your mission. It’s a simple solution, but also one that involves a great deal of research. In this blog we’ll discuss how to determine if outsourcing is right for you, and provide you a guide to interviewing future outsourcing firms. You’ll also find outbound links to articles that we find important so that you can continue your research.
What exactly is outsourcing?
According to The Nonprofit Coordinating Committee of New York, "outsourcing refers to the delegation of key management areas, especially "back office" services to outside contractors or vendors, usually on a relatively long-term basis, with the expectation of improving quality, strengthening management effectiveness, and perhaps lowering costs."
For some nonprofit organizations, outsourcing just makes sense. However, it isn’t a perfect fit for everyone.
Is outsourcing right for you?
In “How to Build a Better Business with Outsourcing,” author Nancy Mann Jackson discusses when and what to outsource. She states, “For every company, the right time to outsource is different. Some businesses have in-house staff to handle daily activities, but may need outside help to undertake new projects that don't warrant another full-time employee. When you and your current employees are unable to manage the day-to-day business of your company and build the business satisfactorily, it may be time to consider outsourcing.” While she is addressing the for profit market, the advice she gives is valuable for the nonprofit community. If you are interested in outsourcing, asking yourself the following questions will help you determine if it is right for your organization.
Questions to ask yourself
Is the function you’re outsourcing exceeding your expertise?
This is where outsourcing makes the biggest impact. If you lack the expertise to properly complete a task you could be harming your organization. Outsourcing a specialized function allows you to ensure it is done correctly.
Do you need more skill or knowledge?
Similar to the above question, if the function has outgrown the knowledge that you, your employees, or your volunteers possess, it’s time to get assistance. For example, when you started your organization managing the bookkeeping was manageable…but then you added grants, and special events, and now you feel overwhelmed. If you’re questioning your knowledge, getting assistance is a good idea.
Are you devoting an adequate amount of time to the function? Are you meeting deadlines on time? Do you have the time to train your employees on this specified subject? If the answer is no, outsourcing is worth researching.
Are you disciplined?
Outsourcing won’t get rid of your responsibilities completely. You’ll still have to devote time to communicating and aiding your outsourcer, so before you begin the process ensure that you have enough time to devote to managing your account.
What you need to know before you outsource:
If you’ve answered yes to the above questions, you’re a good candidate for outsourcing. Before you start shopping around for outsourcing solutions, sit down and answer the questions below. Doing so will allow you to really access your needs, while ensuring you accept the best institution for your mission.
- How much can you afford?
- Is your board required to approve your outsourcing option?
- What do you need outsourced from your daily activities?
- How will it outsourcing improve your operations? What are your expectations?
- What level of involvement do you require? Do you want assistance with the function? Do you want the entire function taken care of?
- Do you want your outsourcer to interact with your board?
- How much communication do you need?
- How much time do you have to devote to the outsourcer?
After you’ve addressed the above, begin your research. Find several companies you like and be willing to interview them. While the process may take several days, it will save you a great deal of time in the long run. Stay tuned for part two of this blog, “Interviewing an outsourcer” (release date of Friday, March 14th) which will include tips for interviewing your selected options, and sample questions to ask them.Extra Credit
For extra credit review the articles we found helpful in crafting this blog:
- A full whitepaper on outsourcing and your nonprofit from The Nonprofit Coordinating Committee of New York can be found at http://www.npccny.org/info/outsourcing.pdf
- A great guide on “How to Build a Better Business with Outsourcing,” can be found at http://www.entrepreneur.com/article/204652
Renata Poe Massie, Content Writer for Jitasa
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