Fish, Loaves and Outsourcing? RISK AWARENESS SEMINAR -PROTECTING YOUR CHURCH NOVEMBER 5, 2015 CARYN RYAN, MANAGING MEMBER, MISSIONWELL LLC
What is Outsourcing? Simply put, outsourcing is a business strategy that involves buying finished work instead of hiring staff and purchasing systems internally.
What is Offshoring? OFFSHORING Outsourcing out of the country
What work can be outsourced?
TRANSACTIONAL WORK EXPERT SERVICES DECISION SUPPORT SPECIALTY Donation processing, Payroll, Billing & receivables, IT help desk & hosting, Janitorial Accounting, Tax, Legal, IT architecture, Graphics, HR, website development Custom reports, Analyses Program administration, employee orientation
A wide range of services are available Example: Finance, Accounting & Administration Bookkeeping & Administration Accounting & Financial Analysis Management & Board Services Contribution processing, service fee/tuition billing, bill payment, settle expense reports, payroll administration, accounting & financial reporting, event administration & support, Donor management Budget preparation, accounting & reporting, Form 990/audit preparedness, Asset & liability management, Treasury services Policies, regulatory compliance, board of director services, 501(c)(3) start-up support
One of clearest signs yet that outsourcing will grow in 2015 comes from the clients themselves
Selecting functions for outsourcing
Selecting functions for outsourcing
EFFICIENCY benefits from outsourcing Streamlined, up-to-date work processes Reduced costs in infrastructure, training and development, insurance and facilities Buy services in increments, Easy to grow and work
EFFECTIVENESS benefits from outsourcing Improved controls add confidence Access to nonprofit expertise Act big! Do what you do best and outsource the rest - Tom Peters, Management Guru Ability to focus on strategic issues Reduce risk in, Obsolescence of work practice standards, technology, and HR/labor laws Eliminate business complexity
What are the DISADVANTAGES of outsourcing Managing conflict dates Synchronizing timetables for work Lack of customer focus Liability of each party
Financial benefits vary with organization size, complexity & Volunteer Capability Fortune 500 Accounting & Finance at < 1% of revenue High Simplification Multiple Notforprofits Target < 2-7% of contributions for accounting & finance Low Affordable Small Scale Large Organization Size
Increasing Standards Intangibles: High standards can promote growth and other benefits ECFA & Nonprofit sector recommendations Potential benefits Audit & Accounting Nonprofit laws Compliance with corporate and labor laws, tax regulations Accountability, capability & transparency Better governance, improved decision making Higher quality programs, higher demand
Managing work is simpler than managing staff and systems Select Outsourcer Recruit, train & supervise employees Provide workspace & equipment tools Administer salary & Benefits Career development Set Standards Performance management Managing Work Monitor Performance Managing Staff & Systems Maintain equipment, Maintain tools Maintain workspace
New Role of Finance Director Strategic partner focused on value adding work and managing outsource contract Focused on helping with the growth of the organization Focused on improved organization effectiveness and reduced costs. Focused on managing risk through reliable and efficient data from outsource partner
Keys to Success: Selecting the right outsource partner 1. Skills & Capabilities 4. Cost Competitiveness 2. Compatibility Skills 5. Reference Check 3. Execution Skills 6. Risk Mitigation
Thank you! Questions, comments or remarks?