Using outsourcing to support growth
Identifying an effective partner
When it comes to fulfilling their ambitions to grow, companies can turn into their own worst enemies. While top executives are casting suspicious glances toward their cutthroat competitors, they may be overlooking the enemy within.
Labor shortfalls and expense overruns—not to mention the challenges of keeping up with new technology platforms—may be what’s constraining the organization’s growth. In an environment where hiring and retaining skilled employees is difficult, companies can end up either shorthanded or hamstrung by employees who don’t have the necessary skills to evolve as the organization grows.
But what growing companies need most is flexibility—not only in human resources, but also in the financial dimension. For years, it has been fashionable for growing businesses to buy only as much of a CFO’s time as they need, contracting with a part-timer rather than prematurely paying out a full-time salary and benefits before the business can support it. As cybersecurity has risen on their list of concerns, company executives are also realizing that the necessity of having a virtual Chief Information Security Officer (vCISO) can be obscured by the price tag of hiring one; it can easily cost $175,000 to attract a full-time CISO. But it’s not as if the only option is to put it off, in hopes that vicious cyber-criminals will take mercy on the unprepared organization.
“A lot of times what companies need is a fractional resource, a vCISO who can do that job as one-fourth of a full-time employee,” says Diego Rosenfeld, Consulting Principal at RSM US. Such fractional access to staff, Rosenfeld adds, is especially prevalent among small and medium-sized businesses. Those companies often “start by looking at outsourcing to keep the lights on” while committing internal resources to high-value activities such as business analysis.
By partnering with a service provider, companies can not only reduce expenses—on hiring and training, for example—but also can cost-effectively ramp up resources as needed. “Sometimes a company will come to outsourcing because of an acquisition or a merger. They need to integrate another business, but their existing staff has day jobs,” says Rosenfeld. On the day a deal closes, a 100-employee business can find its ranks rising to 250. One consequence of that overnight outgrowth: The number of day-to-day computer support issues instantly doubles. “That’s an opportunity to look at outsourcing the help desk,” says Rosenfeld.
Depending on the nature of the deal, a company may also find itself with a handful of satellite offices spread among distinct geographic locations. Such branches not only house people, but also laptops, printers, and networking equipment. A service provider can ensure that there is local tech support. “Not every tech issue can be handled remotely, and you don’t want the expense of flying somebody across the country to deal with a simple onsite problem,” says Rosenfeld. “So you do need boots on the ground.”
Staying financially grounded amid dizzying growth can be challenging. At Egalet, a maker of specialty pharmaceuticals, the number of employees doubled when it brought on a large-scale sales force. The company found itself in the same position as many of Rosenfeld’s new clients, “in the midst of changing IT outsource partners because they feel they’ve outgrown the one they’ve been using.” In addition to managing large projects including engineering and IT security and the 24/7 help desk, RSM aided Egalet in building an IT infrastructure that could scale with company growth and worked on creating an 18-month roadmap for IT investments and process.
“A lot of times what companies need is a fractional resource, a VCISO who can do that job as one-fourth of a full-time employee.” —Diego Rosenfeld, Consulting Principal
RSM also helped the company hire an internal IT coordinator, having concluded that doing so would enable the business to better manage its technology spending. David Jablonski, who serves as Egalet’s IT and operations manager, credits the service provider with helping him “construct a secure, robust, and scalable enterprise,” adding that “they advise me based on their experience and help me make choices.”
When the company deployed Microsoft 365 to its sales staff, RSM set up and trained the 90 new users, freeing the IT function to support the IT infrastructure. “Ultimately, RSM saves us money,” says Jablonski. “If I were to hire someone, that person would not be able to provide the range of experience that RSM has. I need a company that has the knowledge to suggest solutions that fit what we are trying to accomplish.” Jablonski also appreciates the fact that by outsourcing to RSM, he has “access to the depth of engineering and application development that RSM offers.”
“I need a company that has the knowledge to suggest solutions that fit what we are trying to accomplish.” —David Jablonski, IT and Operations Manager, Egalet
Having access to a range of resources is critical for a growing business, where the mix of challenges is perpetually shifting. In addition to leveraging new technologies as they emerge, companies like Egalet, operating within heavily regulated industries, continually confront fresh compliance burdens and rising costs, risking a drop in the quality of the approach. Managing the regulatory and statutory sphere requires focused expertise, especially in industries, from healthcare to retail, where data privacy and regulatory complexity intersect. “It’s a non-stop process of keeping up to speed,” says Rosenfeld.
An effective service provider can foresee future gaps and align resources accordingly, while management focuses on its core strategy.
That said, an effective outsourcing partner needs to begin by identifying a company’s critical assets, prioritizing the areas it will address. “We’ll do an assessment where we dig a little and make sure that we understand the company’s needs,” says Rosenfeld. From that, “we’ll help put together a roadmap of what outsourcing needs to look like to manage the projected growth. In some cases, it’s clearer than in others, such as a company that knows that FDA approval next year will mean adding 100 employees.” Of course, growth doesn’t often materialize according to projections.
But given the right service provider, a company that unexpectedly finds itself in the grips of a speedy growth spurt can be surprised without devolving into panic. After all, it can be sure it will be sufficiently equipped to safely enjoy the ride.
“It's a non-stop process of keeping up to speed.” —Diego Rosenfeld, Consulting Principal at RSM US