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Marie in the Media Outsourcing Is In Kinko's Impress Magazine, Issue 2, 2001 Home-based business owners typically don't have executive assistants. But then again, Marie Schulz is not your typical secretary. Like others, she sets up customers' databases, processes invoices, schedules meetings, runs credit-card charges, crafts proposals, makes travel arrangements, and engineers conference calls. But she juggles those tasks for four different CEOs—none of whom reside in the same state and most of whom she's never even met—all from her home in rural Rumley, Mich. While outsourcing is hardly a new concept for small-business owners, the strategy has skyrocketed in recent years. Three factors have fueled its rise: advances in technology that allow for virtual business partners like Schulz, a trend toward more flexible work models, and a boom in small-business start-ups. According to a recent study by bSource.com, now part of Niku Corporation, which provides Internet software products and online marketplaces, 89 percent of today's small- and medium-sized business owners consider outsourcing essential to their prosperity. The rationale for outsourcing is as compelling as it is simple: In business, delegating responsibility can lead to greater profits. "Having a virtual assistant has freed up my time so that I can do more marketing of my services and deliver more services to my clients," says Val Williams, a New Jersey-based executive coach whose specialty is leadership training and stress management. Since Williams hired Schulz two years ago, her company's gross revenues have grown by 25 percent. Another perk to passing the buck: "You're not committing to paying a salary [and overhead] during your slower months, and you're not paying for talent you're not using," says Paul Edwards, co-author with his wife, Sarah, of Home-Based Business for Dummies (IDG Books). Outsourcing on the Internet A key factor in the explosive growth of outsourcing is the advent of the Internet, which allows companies to farm out a wide range of tasks digitally—bookkeeping, accounting, tax preparation, advertising, and graphic design, to name a few—without regard to geography or the expense and lag time of traditional mail. Thanks to Yahoo Calendar, ThinkFree Office, and other Web-based "collaboration" software, projects can be viewed simultaneously by vendor and client. A computer programmer in California can build an online catalog for a CD-based venture without ever hopping on a plane. One of the newest outsourcing trends to hit the small-business community is the delegation of information technology (IT) services. The average small- to medium-sized business spends roughly $10,000 per employee annually on IT services, according to estimates by the Stamford, Conn.-based Gartner Group, a technology research firm. But today, small companies such as the Atlanta law firm Magarahan Villines & Honis are skirting such monumental expenses by outsourcing the management of their computer networks. Using Web-based architecture in place of a traditional network infrastructure, IT Utility, also in Atlanta, provides the firm with remote service—from software upgrades to technical support—for roughly $300 per month per employee. Mike Lowry, president and CEO of IT Utility, likens his company's service model to the fee system of traditional electric and gas utilities. "With a phone, you don't pay for the wiring, and if you need repairs, they're automatically taken care of. All you pay is a monthly service fee. Why should IT be any more complex?" Worse than the Dentist While a great outsourcing relationship can do wonders for your sanity and bottom line, a bad one can be a nightmare. In bSource.com's study, 74 percent of small-business owners ranked working with a bad vendor as worse than a trip to the dentist. Moreover, 87 percent responded that "selecting vendors on price alone is not the best decision." Sarah Edwards warns businesses to scrutinize outsourcers just as they would full-time job applicants: Conduct interviews and contact references. "For people who are self-employed, your outsourcing partners become your colleagues. They are extensions of your business," says Edwards. "So pick them wisely." Reprinted with permission from Kinko's, Inc. |
