We hear and read a lot today about “outsourcing” and indeed “off-shoring”. They are not the same thing, of course.
“Outsourcing” seems to mean contacting others – outside your own organisation to get specific things done. A good example is manufacturing. So, invent it, design it, and have a specialist company make it. Smaller companies often opt for this ñ and indeed often cannot afford the investment needed to set up production – or even R & D. “Offshoring”, which, incidentally is becoming a term companies do not like to be identified with – since it smacks of exporting jobs to remote regions, means moving activities, often manufacturing, but could be software development and R & D too, is clearly something different and may appeal mostly to large companies.
But what of INSOURCING? we don’t hear so much about it. Let’s take the example of a fast growing but small technology company with a creative inventor at the core. The company is getting moving, has intellectual property and has found a suitable operations director or manager. But the company has raised some funds and has started to generate revenues. Investors and Founder see the need for professional financial management and control, but do not want to add to headcount, and certainly do not need a full time finance person. However, the team feels uncomfortable about simply “contracting out” to an accounting firm. They want someone, part time, who they can feel is really “part of the team”. Enter the INSOURCED Financial Controller – supplied by a specialist outside company which can back up the in-sourced resource with a team at its own base, and necessary methodologies, systems and experience which can give our growing company all the benefits and value of a Financial Controller – working from company premises, with colleagues, but without the cost and employment obligations of hiring yet another staff member.
And, when the company has grown to greater success and strength, the “in-sourced” Financial Controller and be replaced by a part time “in-sourced” Director of Finance.
“In-sourcing” is definitely worth considering – and there are companies around, such as efm, able to advise on all of this and to provide all necessary resources – including a complete range of Financial Professionals to meet those changing needs of growing companies.
…And just in case you are still unsure of what it all means. In one word, insourcing is a process of matching changing resource needs with flexible resourcing.