Centric Networks Ltd
Case Study
Sector: IT
Employees: 30
Location: East England
The big idea:- An IT outsourcing business has improved its efficiency and is growing the business by applying the principles of outsourcing it advocates to others to itself.
What they do
The company provides remote systems monitoring, administration and support to companies worldwide. Using the internet they can carry out maintenance and fix faults remotely. Customers benefit by avoiding the need to hire their own IT people, or pay expensive on-site contractors.
The challenge
To grow the business around a set of core expertise without letting the company become bogged down by the administration of internal processes that it has no depth of experience in.
The solution
The innovative solution was to take a leaf out of their own book! Why not build on the success of the outsourcing model and use it on their own internal processes? Managing Director Fraser Fisher was clear that he wanted to focus fully on revenue earning activities, and saw that a way to achieve this was outsourcing non-core functions such as finance, HR and marketing to trusted third parties.
The first step was to conduct a full analysis of the tasks considered to be ‘non-core’, and then identify those they lacked the professional knowledge or experience to manage effectively. Areas selected included HR, due to the complexity of employment rules and regulations, and higher level accountancy tasks such as financial forecasting and managing tax exposure. Marketing was another area that was chosen to be partially outsourced, and the company has now engaged an agency that advises on marketing strategy and handles the practical aspects of implementing programmes.
Issues arising
Having made the decision to outsource, the company was careful to select the right suppliers. Says Fraser, “We wanted suppliers who could be true partners, so we took time to clarify what we would need. Then we talked to a number of potential companies in each sector, asking for client testimonials. Having made our choices we negotiated written service specifications and costs, which meant that everyone could be clear where they stood and what was expected.“
The outcome
By outsourcing non-core functions, the company has been able to concentrate on revenue earning actitivities, leading to 100% growth year on year.
Other benefits include having experts in its suppliers that a company this size could never afford to employ in-house. As Fraser puts it, “We can rely on HR, marketing and Finance experts but we only pay them for the hours they work. This gives us real flexibility and minimises employment costs that could easily run into tens of thousands per annum.”
“By outsourcing,” says Fraser Fisher, “we can concentrate on the activities that bring us the greatest return. You can see the benefits in our rapid sales growth.”
What could they do next?
Here are some ideas that the DTI innovation team came up with
- Work with their suppliers to increase all of their client bases
- A joint venture offering a range of outsourcing services
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