The decision of which direction is right for you should consider which of your organization’s goals will (or will not) be furthered by each option. In my view, six key operational goals that today’s growing organizations claim to cherish — and should therefore factor into how you approach scaling your operations — are:
- Speed: handling increased sales and delivery volume;
- Accuracy: ensuring minimal errors in end-to-end processing;
- Visibility: providing all your resources with the information they need, when they need it;
- Transparency: beyond visibility, providing open-book status across the enterprise;
- Agility: the ability to respond quickly to changing business conditions;
- Reputation: maintaining stellar relationships with customers and suppliers alike.
Given these goals, which approach to scalability makes the most sense for your organization when growth requires that you ramp up your operational capacity? As the chief operations officer of a purchase-to-pay automation solution, below are some of the factors I recommend keeping in mind.
Staffing up: If it’s not broken, why fix it?
I've observed that for most companies, the first thing they think of when they get a new contract is, "We’re going to have twice as much work (or more). And with more parts to orders, more invoices to pay and more widgets to build, we need more people. That’s worked in the past, so why change?"
Let’s look at that model through the lens of our six goals: Adding staff can help you handle the increased volume of work, though it still takes as much time and money to perform each unit of work. In fact, besides more workers, you might need more supervisors, which could increase the cost per unit.
As for the other goals, accuracy depends on individuals (and some workers are simply more meticulous than others). On its own, staffing up also doesn’t change the visibility or increase the transparency of information. The agility to adapt to sudden business surges can be stymied without timely access to qualified job applicants. Finally, your relationships with customers and suppliers will depend on how well and timely the newly hired staff fill orders, make payments, handle service calls and so on.
Outsourcing: Why not pay someone else to deal with it?
If relying on adding staff to scale up operations has too many “maybes” in it for you, why not let someone else deal with some of it? There are plenty of companies that would be happy for you to farm out your human resources, procurement, order fulfillment, accounting — whatever you ask. For example, if you haven’t grown (yet) to need a full-time human resources team, agencies can take these responsibilities off your plate. Outsourcing also often carries a lower price tag than in-house staff. However, remember that you often get what you pay for.
Outsourcing may reduce hiring in-house staff, but it can also have some drawbacks. For one thing, you lose some control over the quality of the work being done. Depending on the timeliness of the work, such as invoicing and payments, it could impact relationships with customers and suppliers. You might also find there is a general loss of both visibility and transparency in this type of relationship if much of the work happens in a proverbial “black box.”
As for speed, service-level agreements are meant to guarantee a level of quality or performance. Just remember that some agencies might be facing the same difficulties scaling with staffing that you do, which means outsourcing might not always solve your problem.
Automation: Should you take humans out of the loop?
Another way to scale up your operations is to identify business processes with excessive manual, repeatable tasks and automate them. In HR, for example, automation can scan resumes for keywords and skills. Before you worry about eliminating human jobs — whether in-house or outsourced — remember that we're talking about scaling your operations to match your growth. If you had 100 orders and payments to process each day and you now have 500, automating that function might let you handle the growth more rapidly and accurately than if you’d hired five times the staff. (That’s speed and agility.) Your existing experienced staff can then handle the tougher cases — those requiring the level of processing power only an experienced human can provide.
Automation might also help you reach the other three goals as well. The solution you choose might be able to provide visibility and transparency for your staff and partners, for instance, which can enable you to build and maintain strong relationships.
Of course, remember that automation also isn’t without its challenges. It requires rethinking existing processes prior to automating them, as well as setting clear expectations with all stakeholders for what will (and will not) be the outcome. While automation may remove the need to “staff up to scale up,” it may also require retraining existing staff to perform more valuable, high-impact work. Automation must also be highly coordinated with IT so that it does not run afoul of any existing infrastructure and security standards. With proper planning, these and other potential pitfalls can be navigated.
You decide the best way to scale your business operations.
There will never be a substitute for the vast experience and expertise of your workers. To keep up with rapid growth, you can staff up, let someone do it for you or scale your operations via process automation. By keeping the aforementioned factors in mind, you can make the decision that's right for your company.
This article was originally published to Forbes.com as a part of their Forbes Business Council on December 7, 2021 and authored by Yooz CEO Laurent Charpentier.
