Jul

7

As outsourcing is now the trend of how large companies around the world do business, small-to-medium enterprises (SMEs) might seem to be out of the loop for good but what works for the Big Co.’s can just work as good for the Small-Medium Co.’s, maybe even better.

Perhaps the biggest benefit outsourcing provides small and medium-sized companies is giving them the gift of time.

Entrepreneurs need to recognize that they simply do not have time to do the myriad tasks of running the business (such as payroll and taxes) and thinking about their customers and growth strategies.
[...]The business owner has no time to do anything right – multiple tasks mean multiple errors.”

Ajay Sirsi, marketing professor of the Schulich School of Business at Toronto’s York University and author of the business textbook: “Marketing Led, Sales Driven.”

In business, it is cutthroat be it in the domestic and in the international markets. To survive, one must meet customer demands. To succeed, one must meet customer demands dynamically, improving on quality while minimizing costs.

At times the challenge of success can be like a cage to many SMEs as they never consider “outsourcing” as an viable option due to misconceptions, such as only large companies that cater to a global market should can afford to outsource but the fact can be seen that outsourcing can be an option for SMEs and it is an option that can open to other options.

Here are some SMEs around the world which have used outsourcing to their advantage in managing their resources and time in meeting their customer demand.

The Dairy Queen restaurants that operate in Courtice and Bowmanville, Canada have outsourced its payroll processing functions to a third-party.

The outsource service has allowed the restaurant franchise avoid unnecessary cost of acquiring in-house computer systems and adhering to government legislation,   through penalties on late statutory remittances as well as the ability to  directly deposit payroll to employees’ bank accounts for convenience.

The Philippine-based Betis Crafts, one of the country’s biggest furniture firms and exporters came up with its own outsourcing strategy.

The company, known worldwide as a quality manufacturer of different kinds of furniture with intricate carvings, has tapped eight of its former supervisors for various needs as demand from export markets increased in the past five years.

These former supervisors, who all learned the furniture business a la Betis during their stint in the company, received the initial capital from Betis that was payable in two years. Using the capital, these supervisors set up shop with pools of twenty to fifty workers and acquired the necessary equipment.

Each factory has its own niche: one is an expert in making rose carvings while another does the wood casings for products such as beds and tables.

These factories source raw materials from Betis to maintain product quality. The goods are delivered to Betis which then makes the finishing touches and final packaging.

Outsourcing can make an SME more productive through the elimination of tasks with payroll taxes, cash checks, records of employment that can serve as distractions and the broadening of an SME’s production base in meeting client demand on time and with good quality.

Outsourcing however is not without risk. Care must be taken in selecting a stable and capable business processing outsourcing (BPO) service provider to handle those company processes. Reputation and qualifications of the BPO service providers must be well-considered.

Large, reputable BPO firms offer attractive service packages for SMEs. Due to the growing competition in the BPO industry, these firms are not reluctant to meet more than half way in acquiring new clients.

SMEs can also consider qualified but smaller BPO firms as well. These can be more protective and pay more attention to the mutual benefits and long-term success of the outsourcing partnership.

Constant and consistent communication is integral in maintaining any relationship and it applies most importantly in an outsourcing business relationship where the open exchanging of ideas and information instills a sense of mutual responsibility that when used well can reap in a whole new world of rewards through outsourcing.

Outsourcing Solutions, Inc. – your outsourcing partner!

References:

  1. Chandres, Rajan. “Offshore 101 for SMEs”. 23 July 2007. Intelligent Enterprise Website. Accessed 3 July 2008. Link here
  2. Gonzales, Iris. “SMEs urged to outsource.” 22 February 2006. BusinessWorld. Accessed 3 July 2008. Link here
  3. Schuster, Eli. “Small firms overlook outsourcing benefits.” Business Edge – Ontario Business News. Accessed 7 July 2008. Link here

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