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Outsourcing ‘still makes good business sense’

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The truth facing all businesses operating in today’s market is that because of the advent of technology and systems, there are several ways to manage resources. However, while security and access control are front of mind for decision makers as they consider ICT procurement strategies, the reality is that outsourcing specific functions to third party service providers makes sense.
James McKerrell, CEO of CRS Technologies, a provider of services and solutions aimed at the Human Capital Management and HR markets, says generally the trend is to outsource non-core functions.
“However, the truth is that outsourcing to reliable partners offers up a number of advantages and decision makers are keen to exploit these and improve efficiency of operation,” says McKerrell. “So, now the reality is that businesses are outsourcing payroll and HR administration, travel bookings and accounting, for example.”
One of the biggest benefits to outsourcing is that the business is then freed up to concentrate on core strengths.
Aside from paying more attention to critical revenue streams, the other advantage is that decision makers can apply strategy to cut costs, ensure compliance with regulation and refine processes and procedures – all of which have an impact on operations.
“It could be beneficial to outsource certain core functions … for example, in a manufacturing concern it may be better to outsource certain component manufacturing rather than to tool up the organisation to do so, particularly in a one-off contract,” McKerrell adds.

Good timing
Although outsourcing is proven to be a winning recipe when applied strategically and in line with business requirements and through the right partner, it is important to time this properly.
There is a school of thought which some follow and suggests that the festive season may be the best time to outsource – when resources are in shorter supply and there is more downtime than would normally be the case.
“The idea is to pass on the responsibility to an experienced, credible and reliable partner during non-peak times – but I don’t believe it is a good idea, necessarily, the benefit of outsourcing cannot be measured over a short period… the ramp up time may also be too long,” McKerrell adds.
Although it is difficult to quantify the percentage of companies that take advantage of the outsourcing business management model, CRS Technologies’ view is that every company has or will outsource at least one function at some point in their development.
“Given the SA economic and employment landscape, I believe we are ahead of the game compared to other countries,” McKerrell says.