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Do more with less: The SME’s guide to effective outsourcing

As a SME owner, limited resources can be a major hurdle to growth. You wear many hats,from managing finances to overseeing operations, and it can be tough to find the time and expertise to excel in everything. That’s where outsourcing comes in. 

By delegating specific tasks to qualified external providers, you can free up your valuable time and resources. Imagine the possibilities! This allows you to focus on your core competencies, the things that truly set your business apart. Whether it’s developing innovative products, delivering exceptional customer service, or crafting a killer marketing strategy, outsourcing lets you dedicate your energy to what you do best.

In this edition of Let’s Talk, our experts delve into effective outsourcing strategies specifically designed for SMEs.

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Steve Rotter, Chief Marketing Officer at DeepL

Steve Rotter
Steve Rotter, Chief Marketing Officer at DeepL

“For businesses that operate globally, creating multilingual content – from websites and email campaigns to social media content – is key to a successful digital marketing strategy. Localisation of content is essential for driving growth and equally, establishing meaningful connections with global audiences. In fact, recent data shows that 96% of marketers reported a positive return on investment (ROI)  from their translation and localisation projects, with 65% reporting an ROI of 3x or greater.

“With proven ROI, marketers should consider integrating machine translation and artificial intelligence (AI) powered writing tools in their digital marketing tech stacks. The benefits of this include but are not limited to:

  • Increased efficiency – AI translation allows for speedier, more streamlined project delivery
  • Do more with less – When you save time in the translation process, project teams can spend more time producing more content
  • Quality versus quantity – Harnessing the power of high-quality AI translation tools can prove more accurate, nuanced translations.

“Ultimately, by leveraging machine translation and embracing AI, businesses can optimise their localisation workflows, improve the quality of their content, and maximise their ROI.”

Sara Deady, Partner at McGrathNicol Advisory

Sara Deady
Sara Deady, Partner at McGrathNicol Advisory

“The management of outsourced providers has never been so important. Gone are the days of being able to say, “I outsourced that, it’s not my problem”. From health and safety to cyber security, the outsourcing of any business function requires careful consideration of the risks and benefits. You may be able to outsource the job, but you can’t outsource the risk.

“Outsourcing can help reduce costs and improve service delivery, but it can also expose a business to significant risk. Putting in place strong processes such as well communicated policies and procedures, defined roles and responsibilities, ongoing monitoring of performance (with documented KPIs), and clear exit strategies and termination processes are all essential to protecting your business. At the onboarding stage, it is crucial that SMEs consider the following: Do you really know who you will be doing business with? Do you know what risks your outsourced providers may pose to your business?

“It is imperative that SMEs carry out risk-based due diligence to understand who their suppliers are. Companies must invest in understanding not only the financial standing of their suppliers but also their reputation, governance, compliance, corporate structures and cyber security frameworks.”

Adrian Towsey, Area Vice President of Small and Medium Business at Salesforce

Adrian Towsey
Adrian Towsey, Area Vice President of Small and Medium Business at Salesforce

“Running a small business is no walk in the park. Between juggling expenses, payroll, inventory, marketing, and more, there’s a lot to handle. Figuring out what to outsource and what to digitise can be overwhelming.

Recent research found that digital-first small businesses have an advantage over their counterparts, positioning them strongly to succeed. Particularly, by embracing digital-first customer relationship management (CRM), businesses can gather all their data into a single view to make more informed decisions about campaigns in motion, which will, in turn, drive greater return on investment.

“Using AI to take care of the more time-consuming tasks can also be a game-changer. Outsourcing time-intensive tasks to AI not only frees up time for business-critical work but also streamlines processes, accelerates workflows, and personalises customer experiences. Instead of asking humans to intervene in every individual AI interaction, we’re designing more powerful, system-wide controls that put humans at the helm of AI outcomes. No matter how sophisticated AI becomes, the future of AI will always be AI plus humans.”

Sharon Melamed, Managing Director at Matchboard

Sharon Melamed
Sharon Melamed, Managing Director at Matchboard

“With 30 years’ experience in outsourcing in many countries, I speak to hundreds of SMEs a year about how they can make outsourcing a success.  One of the big pitfalls is not knowing which model you’ve signed up for – around half of SMEs are on a managed service arrangement with a BPO, and the other half are on a staff leasing model. They are completely different in terms of both pricing and deliverables. With staff leasing, the BPO is not responsible for KPIs and the offshore team is under your management. Another area I help SMEs with is choosing the right location and vendor for their needs. Fiji and the Philippines are the most common locations requested – up until a few years ago, Fiji was known more as an island paradise, but now it’s a business paradise as well for everything from customer service to bookkeeping and admin roles. In terms of vendors, there’s no one size fits all, and there are hundreds of BPOs we’ve captured information on so can recommend the best fit for each requirement.”

Matt Loop, VP and Head of Asia at Rippling

Matt Loop
Matt Loop, VP and Head of Asia at Rippling

“In challenging economic conditions, SMEs are often the first to experience financial strain and are actively searching for methods to enhance efficiency and productivity.

“SME business owners can’t handle everything by themselves, so leveraging both technology and outsourcing becomes vital in unlocking greater efficiency and growth. Take payroll management for example, by harnessing the right technology to streamline workflows for greater accuracy and compliance, and strategically outsourcing functions such as payroll management to experts, this allows SMEs to free up precious time and resources towards core objectives. Expert payroll and HR partners ensure accuracy, compliance, and streamlined operations, all while lightening administrative burden and empowering businesses to focus on innovation and expansion.

“But the benefits of technology and outsourcing extend beyond merely handling payroll. From IT services to customer support and marketing, SMEs can effectively tap into specialised skills and cutting-edge technologies that might otherwise be inaccessible.

“The key lies in finding the right outsourcing partners who understand the unique needs and challenges of SMEs, providing solutions that align with their objectives. Ultimately, outsourcing isn’t just about cost savings; it’s about unlocking untapped potential and accelerating business growth.”

Kenneth Chestnut, Global Head of Ecosystem at Intuit Mailchimp

Kenneth Chestnut
Kenneth Chestnut, Global Head of Ecosystem at Intuit Mailchimp

“Cost-efficiency and resource optimisation are critical to sustainable growth for today’s SMEs. Partnering with specialised marketing consultants can help businesses access the expertise, resources, and scalability they need to stay ahead in today’s ever-changing environment.

“Here are key factors to consider when selecting a marketing partner:

  • Specialisation: Ensure the partner’s marketing capabilities align with your needs.
  • Agency size: Determine the holistic needs of your project that may benefit from a small agency’s personal touch or if an all-hands-on-deck approach from a larger agency is more preferable.
  • Budget and timelines: Discuss task complexity and scalability upfront for a realistic scope and timeline.
  • Personality fit: Opt for a pilot project to assess if communication and business styles are a match.

“From helping with projects like importing lists or organising audience data, to assisting with always-on marketing, like a monthly newsletter or a bespoke email marketing campaign, hiring marketing experts can help SMEs achieve their business objectives more efficiently.”

Christina Foxwell, CEO at Ignite Purpose

Christina Foxwell
Christina Foxwell, CEO at Ignite Purpose

“Eighteen months ago, as a CEO facing pressures to cut costs and boost output to expand our practice, I turned to outsourcing—a strategy many Australian companies are exploring to stay competitive. This journey illuminated the importance of effective outsourcing through robust partnerships, leading to the establishment of our Ignite Purpose Philippines operation. This move embedded outsourcing as a strategic element of our global operations, providing benefits not only to us but also to our clients.

“Outsourcing can significantly alter your cost structure, potentially cutting payroll expenses by two-thirds. It does more than save money; it connects you with a dedicated, skilled team passionate about your projects, bringing an unmatched level of energy and expertise.

“The key to successful outsourcing lies in treating your outsourced team as an integral part of your own, not merely as an external resource. This mindset fosters a collaborative environment where outsourced staff are engaged and take ownership of their work, aligning closely with client objectives.

“From our experience, such partnerships boost productivity and satisfaction on both sides. You not only save money and enhance output but also collaborate with people who are keen to help your business succeed. The broader impact of effective outsourcing goes beyond immediate financial benefits; it equips your business with the manpower and capabilities needed to significantly scale operations. Just one year after adopting this strategy, we successfully launched a global business, an accomplishment that would have been unattainable without the strategic use of outsourcing.

“Are you ready to harness outsourcing as your competitive advantage?”

Julian Fayad, Founder and CEO at LoanOptions.ai

Julian Fayad
Julian Fayad, Founder and CEO at LoanOptions.ai

“Outsourcing is a strategic lever for small to medium companies that not only want to optimise their operations, but also have the ability to focus on core competencies. Partnering with specialised vendors for digital marketing, software development, and cybersecurity gives us access to a wider net of expertise and resources and ensures high-quality solutions while we focus on what we do best. I’d say one of the most important practices when dealing with external partners is robust vendor selection based on cultural fit and alignment with your brand. Clear and open communication channels are also important, as well as ongoing performance monitoring. Fostering long-term collaborations with partners that align with our commitment to excellence allows us to allocate resources strategically, enabling the rapid growth and continuous innovation we are known for.”

Trena Blair, CEO of FD Global Connections

Trena Blair
Trena Blair, CEO of FD Global Connections

“Digital marketing is vital to business growth in the USA, even for companies operating on a limited budget. Here are key strategies for implementing cost-effective tactics:

  1. Content Marketing: Create high-quality, relevant content that resonates with your target audience to drive organic traffic and establish thought leadership in your industry.
  2. Social Media Marketing: Recruit skilled Interns in the USA to develop and engage with your audience. Interns are familiar with the local language and how to drive website traffic by regularly posting, sharing valuable content, and interacting with followers.
  3. Email Marketing: Coupons are popular in the USA, so incorporate these into your email campaigns to nurture leads, and promote products or services.
  4. Search Engine Optimization (SEO): Optimise your website content to improve visibility and drive organic traffic, focusing on relevant keywords, meta tags, and quality backlinking strategies.
  5. Partnerships: Collaborate with industry influencers or micro-influencers to reach a broader audience and generate authentic engagement with your brand. Look for partners open to non-financial benefits, such as cross-promotion to their clients.

“Businesses expanding into the US can effectively reach their target audience, drive engagement, and achieve business growth without breaking the bank.”

David Price, CEO at Peninsula Employsure

David Price
David Price, CEO at Peninsula Employsure

“While outsourcing can be a great way to cut costs, improve efficiency and fill operational or skills gaps, it should be done with careful consideration and assessment – the wrong decision could turn out to be more costly, especially for smaller businesses.

“Conduct extensive research on the third party you are looking to outsource to and don’t be afraid to ask the hard questions about their capabilities when determining whether they are the right match for you and your business.

“It’s important to choose a provider who can meet the business’ specific needs. If they are too slow to deliver the agreed product or service, or create something that is poor quality, customers may be negatively impacted and the reputation of your business damaged.

“You may need to share sensitive company data when outsourcing depending on what the third party is being tasked to do, so ensure the contract has a strict confidentiality or non-disclosure agreement to minimise the risk of a data leak.

“Depending on the situation, outsourcing may give rise to redundancies or trigger other obligations such as consultation. If not addressed appropriately, such matters could result in unfair dismissal or other penalties, so seek expert advice.”

Andrii Bezruchko, CEO and Founder at Newxel

Andrii Bezruchko
Andrii Bezruchko, CEO and Founder at Newxel

“Focus on clients and core activities – that’s my advice to CEOs and founders of SMEs based on my entrepreneurial experience. Leave the rest to professionals in their field.

“Why? SMEs usually have limited resources like finance, knowledge, and talent. Establishing processes in-house can be costly and inefficient. Consider outsourcing for:

  • Back office functions like accounting, payroll, and IT support. This can help SMEs reduce costs and improve efficiency.
  • Supporting activities like HR, logistics, and legal services can be outsourced to access to specialized skills and resources.

“When it comes to primary activities that directly impact your business, try outstaffing. You get assistance with talent acquisition while retaining control over the management and integration of the outstaff team. This model is adaptable, allowing you to adjust the team’s size and workload according to your needs.

“Here’s a simple guide:

  • Identify core/non-core competencies to concentrate on your strengths and competitive advantages.
  • Evaluate potential outsourcing partners based on factors like cost, quality, and reliability to ensure a successful partnership.
  • Identify and address risks to avoid data security breaches and intellectual property theft.
  • Monitor performance to ensure that outsourcing partners are meeting agreed-upon service levels and delivering value.”

Konstantin Klyagin, Founder and CEO of Redwerk

Konstantin Klyagin
Konstantin Klyagin, Founder and CEO of Redwerk

“With outsourcing, SMEs can complete project-based tasks without the need for full-time employees or the hassle of recruiting specialists. But what kind of work is ideal for outsourcing?

“Typically, it’s one of two kinds. The first is repetitive and time-consuming work like Tier 1 customer support (unless you’ve automated it with chatbots). This type of work steals valuable time from your employees, which they could have used for higher-level activities.

“The second one is the complete opposite – it requires a high level of expertise that SMEs lack in-house. It could range from technical tasks like migrating an on-site system to the cloud to enable remote work to bookkeeping and HR functions.

“At Redwerk, we outsource part of marketing tasks related to HubSpot setup and PPC because our department’s strength lies in content marketing. Also, when expanding our services, we like to strengthen our recruitment team with independent advisors to ensure the best fit for the role.

“Always start with a small scope of outsourced work. This minimizes risk and allows you to assess the vendor’s capabilities. Remember, the best results come from strong partnerships. So, when looking to outsource, search for a partner, not a contractor, for a more committed and successful collaboration.”

Karlie Taylor, Head of Marketing at SHOPLINE Australia

Karlie Taylor
Karlie Taylor, Head of Marketing at SHOPLINE Australia

“For small and medium-sized enterprises (SMEs), outsourcing can be a game-changer. It allows you to focus on your core competencies – the things that make your business unique – while leveraging external expertise in areas that drain your resources.

“Here’s how SMEs can win with outsourcing:

  • Focus on Your Core: Don’t outsource everything! Keep strategic decision-making and core functions in-house. This ensures your brand identity and vision remain protected.
  • Target Specific Skills: Identify tasks that require specialized skills, like graphic design, social media marketing, or IT maintenance. Outsourcing these frees up your team and infuses your business with fresh perspectives.
  • Choosing the Right Partner: Do your research! Look for a provider with a proven track record, expertise in your industry, and a clear understanding of your goals. It’s vital to find someone whose vision aligns with yours.
  • Communication is Key: Regular communication is essential. Clearly define project expectations, timelines, and preferred communication methods. This fosters a smooth working relationship and ensures successful outcomes.

“By following these strategies, SMEs can leverage outsourcing to unlock growth, improve efficiency, and achieve their business goals.”

Kerry Kingham, CEO and Managing Director at Chooze

Kerry Kingham
Kerry Kingham, CEO and Managing Director at Chooze

“Firstly, understand your outsourcing needs and identify whether they will support core or non-core activities. Not all activities are suitable for outsourcing.

“Choose the right outsourcing partner – do they align with your business culture and values? Ensure their business practices are ethical, and be confident in their hiring, people management, and adherence to human slavery policies.

“KPI and goals are important, you need to be clear about how you will measure their success including consideration of quality, adherence to processes, and turnaround times.

“Regular communication, effective collaboration, and building a long-term relationship will deliver better outcomes for both parties. Onboard them to share values and culture. Understand the potential risks associated with outsourcing and ensure you build a contingency plan and include the risks in any risk register or business continuity plan.

“As you will be sharing data outside your immediate organisation, make sure best practices are in place for delegation of authority and separation of duties. Ensure password control and MFA are in place for access to systems. Be clear about how they must manage your data and ensure processes are in place to address cyber security risks and data breaches.

“Done well, outsourcing can be an effective lever for cost-effective growth. However, if not structured well or executed effectively, it can be a reputational nightmare.”

Tim Wheeler, Managing Director at Searchr.TV

Tim Wheeler
Tim Wheeler, Managing Director at Searchr.TV

“As we work to set a new standard in entertainment technology user convenience, collaborating with external partners for software development allows us to draw on specialised skills and resources while maintaining mission-critical focus on delivering exceptional value to our users.

“Outsourcing empowers SMEs to optimise operations, stay nimble in a competitive landscape, and focus on what they do best. However, this can be done only if clear project scopes and open communication have been established. It is also paramount that alignment with brand identity is top of mind when working with external partners.”

Jake Majerovic, Managing Director of Thinkless

Jake Majerovic
Jake Majerovic, Managing Director of Thinkless

“If you’re considering outsourcing, first ask yourself, ‘why?’.

Is it emotional, like feeling overwhelmed or no time, or is it objective and based on clear financial benefits?

“Following that, understanding the skill level required is crucial. For example, outsourcing software development or accounting demands professional qualifications. Verify the work through checks and controls, like code reviews or financial audits, to ensure it’s done correctly.

“Quality checks are essential. In software, this means rigorous testing. Skipping these checks can lead to significant risks, such as losing customers due to poor performance or security issues. Similarly, in accounting, mistakes can disrupt payroll, impacting employee satisfaction and retention.

“Evaluate the true cost benefits of outsourcing compared to in-house management. Consider all aspects, including hidden costs, like managing an outsourced team. For instance, Australia’s complex payroll system might pose challenges for external accounting services, demanding additional oversight from your end.

“Determine if outsourcing is a temporary or permanent solution. Consider the long-term impacts, especially as your business grows and your needs evolve. Regularly review your outsourcing model. What worked a year ago might not be suitable today. Set clear targets to reassess and justify when to outsource versus managing in-house.

“Remember, watch those blind spots!”

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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