Benefits of Outsourcing
Outsourcing is defined as “contracting with a vendor to provide a recurring internal activity.” The primary reason associations choose to outsource is to “gain access to expertise,” followed by “focus on core activities”, and “lower operating costs”.1 The Board of Directors are responsible for driving the mission and vision of an organization, but are they equipped to operate the business aspects of the organization? When associations struggle to do more with less, the efficiencies of using outside professional management resources becomes more attractive. AMCs take weight off the shoulders of volunteer leaders, limiting the risk associated with having the work done wrong by marginally qualified staff.
Outsourcing leads to organizational excellence allowing the Board to excel at the core competencies while your outsourcing partners excel on your behalf in their core competencies.
A study conducted in 2009 shows that organizations with up to $1M in annual revenue and managed by an AMC enjoy at least a 10-fold advantage in net profitability over standalone organizations. For organizations between $1M and $5M in annual revenue, AMC-managed organizations enjoy at least 20% greater net profitability than standalone managed organizations. In addition, AMCs have developed the ability to support more diverse non-dues revenue programs.2
While volunteer leaders focus on key competencies for continued organizational improvement, AAG can focus on business aspects of the organization that will lead to the next level of what you have defined as success.
What is an association management company?
An association management company (AMC) is a professional service company that specializes in providing management services for associations on a fee-for-service basis. AMCs provide the professional staff, administrative support, office space, technology, and equipment an association needs to operate efficiently. An association management company typically manages several associations from one company location, providing a wide range of benefits including shared technology systems, access to expert specialized staff, and shared purchasing power (ASAE).
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1 The Art Of Outsourcing, By: Andrew Lang. ASSOCIATION MANAGEMENT, February 2000
2 AMC Managed and Standalone Organizations – A Sibling Study. By: Michael T. LoBue, CAE. http://www.amcinstitute.org/documents/WhitePaper_AMCManaged.pdf