Outsourcing has profited many big businesses around the world, and seeing the manifold advantages, mainly in terms of financial savings and the expertise with which the work is being handled, many non-profit organizations are also turning to outsourcing for some of their functions like paperwork and IT services. But considering the uniqueness with which a non-profit’s cash flow is structured, can outsourced IT works prove to be a boon for such businesses?
Let’s take a look at some benefits outsourcing brings for non-profits. Often non-profit organizations do not have the resources to employ highly qualified individuals in their field. Outsourcing their back work gives them access to more qualified staff, who can do the same task more efficiently, taking less time in the process and at virtually the same price, often less. This gives the organization more time and resources to focus on their core processes and lets their staff work in other areas. The company does not need to invest in functions like book-keeping and IT, which constantly require updated hardware and maintenance. This proves to be a great advantage for non-profits as they have limited financial resources, which they can’t afford to invest in hardware and staff. The company can easily invest in resources and projects that focus more on its mission and generate funds for them, rather than investing in back works which they prefer being performed offshore. Outsourcing even sometimes ensures that no fraud can happen in managing the payroll and book-keeping as all the accounting functions are effectively separated between the outsourced company and the local accountants.
But outsourcing sometimes may not be the best alternative for non-profits. Imparting their accounting work to a third party leaves them with no control over the operations, which, considering the manner in which a non-profit functions is not desirable, if things don’t turn out their way. Also, there are security and privacy concerns. Small non-profits generally don’t have the wide segregation of departments as in a large business, so outsourcing their work reveals sensitive business information, which is not desirable. The companies have to invest in time and money so as to properly draw a line of demarcation between the work that is outsourced and their internal operations. Also, many small non-profits lack the resources to invest in the short term costs of outsourcing. Studies have revealed that though they recognize the importance and benefits of outsourcing, their limited budget doesn’t allow them to go for a short term cost. Instead, they tend to rely on their in-house labor force to deliver in a longer duration, so as to eradicate the need of a heavy initial investment. The outsourcing service providers often stick to a particular standardized output. Some non-profits also find it difficult for such standardized solutions to fit their needs.
With time, the dependency of non-profit organizations on such third party service providers for their back work is likely to increase, considering the many benefits they offer. But, keeping in mind their limited resources, complete switch-over to outsourcing must be done in calculated steps.
