The power of insourcing
If the past 18 months have taught us anything, it’s that we all need to be increasingly adaptable to what’s happening in the world around us.
It’s an attitude that’s especially important for SME business owners to embrace. Because that’s where success lies. If you can adopt more agile ways of working, you and your team will always be ready to react to – and seize any opportunities in – changing business trends and trading conditions.
There have, of course, been clear commercial winners and losers during the Covid-19 crisis to date. But whether your business has been affected positively or adversely, there are distinct lessons that we can all learn from our experiences so far.
Foremost among these is the inherent need for enhanced business agility – whatever sector we happen to operate within.
None of us really know what’s around the corner. So we need to prepare in the best possible way for future uncertainties. How? By keeping operations as lean, flexible and streamlined as we can.
Insourcing vs Outsourcing
Recent years have seen a significant increase in outsourcing across many sectors, as companies look to free up capacity (and even costs) by off-loading certain tasks to a firm that can typically do those tasks quicker and more effectively than an under-skilled team trying to tackle them in-house.
However, many businesses are now exploring the potential of insourcing instead. Because this option has the power to deliver substantial business benefits, enhancing both operational efficiencies and capabilities within your company, in a way that also enables easy budgeting – but without the traditional downsides of outsourcing.
Insourcing is making the business decision to perform a function, process or project in-house, rather than handing it over to a third-party contractor that works entirely independently of your company. Insourcing often involves bringing in specialists to fulfil temporary needs. These experts work alongside, and as an extension of, your existing team and can also help to train employees, passing on the skills they need to take future responsibility for those tasks.
Opting for the insourcing route offers significant advantages over simple outsourcing of the key expertise your business needs.
Generally speaking, while outsourcing can help reduce overheads and personnel costs, it also has the potential to open up business risks associated with quality control, reliability and responsiveness. That’s because work is performed under contract by external suppliers, who typically don’t have any knowledge of your company culture and the inevitable lack of collaboration leads to disconnects between internal departments and even team members. There’s also usually very little flexibility or personalisation, with clients having to fit around the outsourcer’s rigid processes, and accounting systems that may not be right for the business.
Insourcing, on the other hand, enhances control and internal capabilities – without adding to your overheads. You control the quality of work and people performing it without the hassle of day to day management or recruitment, and the decision to insource demonstrates investment (and confidence) in your team, acknowledging the value they bring to your business. You’ll benefit from the introduction of best practices and streamlined processes that are absolutely right for your business, which will help to increase synergy among departments and develops the skills of internal team members.
Transform your finance function
The business landscape is shifting as more SMEs start to appreciate the benefits of insourcing certain aspects of their operations. For the time being, outsourcing will probably still be the best option for some back-office tasks – like managing and maintaining your IT infrastructure, for example – but insourcing can transform your finance function in multiple positive ways.
At YRH, we’ve noticed a dramatic increase in the number of businesses wanting to work with us to optimise and professionalise their finance functions. And we’re only too happy to help – because we genuinely believe it’s the way forward.
SME business owners are recognising that they need to access know-how and capability that they simply don’t have in their existing in-house teams – and that they need to tap into additional specialist talent if they want a back-office function that looks more like a profit centre than a cost centre.
You can achieve this in a flexible, scalable and affordable way by harnessing the power of insourcing.
Business agility ‘in a box’
Forget the old resourcing model. These days, you can simply buy in what you need, when you need it. That’s business agility ‘in a box’.
Put simply, insourcing is having the best of outsourcing and the best of still having people in your business that look and feel like part of your team, who understand your culture and way of working. What’s not to like about that equation?
Our own business experience has been that insourcing is an exciting alternative proposition to having the same old people and headcount on the payroll. It’s a brilliant way to tap into the specific expertise you need, embrace innovation, align to best practice and, quite simply, introduce a breath of fresh air in your business – without breaking the bank or suddenly shifting to too radical a business strategy.
Through this period of uncertainty and volatility, that’s exactly what we all need.
Having a traditional accountant at the end of the phone to talk about tax and year-end accounts just isn’t hugely relevant anymore. What SME owners need right now is access to good, ongoing financial management information and proper commercial expertise – and the ability to drive real value out of both.
Buy the right balance for your business needs
Insourcing allows you to reach out to acquire the exactly the right balance of financial experience, expertise and best practice that your business needs in its current situation.
Right now, you need people who can talk you through your numbers and show you what your cashflow is going to be like for the next six months. You need to start making decisions now about how you’re going to structure your business going forward.
Whether your team will continue working from home or you decide you do need to retain dedicated office space, you need to be looking closely at your cost base, getting your forecasts lined up, getting on top of your numbers and making sure you’re planning ahead.
Use the headspace offered by some summer holiday time to do some serious thinking.
There’s real movement in the marketplace, so now’s the time to make any changes you’ve been considering. Working practices are evolving – and you don’t want to be left behind.
How are you going to run your business over the next year, two years, three years? Where is it heading right now? And if you don’t like the feel of that destination, what are you doing to change it?
Agility and adaptability will be the key watchwords over the coming months and years. So make sure you take the opportunity now to set yourself up for success.
Insourcing is so much more than “just buying a bum on a seat”. Insourced support from YRH isn’t simply about getting the day-to-day done – our service extends to putting in place a solid financial management framework that supports and enables a brighter financial future for your business.
This framework (Our 12 Key Areas of Impact) provides a roadmap for everything from fixing today’s immediate issues to optimising and professionalising your finance function in a way that streamlines and protects your business while also freeing up growth (rather than holding it back). It also enhances the future value of the business, too. Because businesses with good financial management frameworks attract a much higher value than those that don’t – and you get to benefit from the increased profit and cashflow until that exit opportunity comes along.
For us, providing you with this roadmap and the true value of insourcing is all about creating infrastructure that looks like a national motorway network, not a labyrinth of A and B roads.
Designed, built and maintained properly, this essential infrastructure at the heart of your business will immediately help the whole company to work better and more cost-effectively. It will also help it to scale tomorrow and maximise returns when it becomes time to sell too.
If you’d like a friendly chat about the benefits that insourcing could bring to your business, please do get in touch. We’d love to be able to give you a feel for how our financial experts could work alongside you and your existing team – to help transform your finance function.