Verification of potential business partners or competitive companies usually takes a significant amount of time. It is necessary to find performers to conduct a paid audit, conclude a cooperation agreement, and build an interaction strategy. Only after that can the outsourcing company start its work.
Another option is to create your own staff to verify contractors. In this case, things will go faster, but you will have to pay a salary to analysts and “due diligence” staff members are expensive. On the Glassdoor website, you can see that in the US, analyst’s salary ranges from $42.000 to $153.000 a year. The average salary is also a sizable, $97.500. Business owners face the dilemma of choosing the correct option.
This case is demonstrating how companies from Arizona with a similar problem managed to find a quick and relatively inexpensive way to verify their future partners.
Company Information: Company A (we were asked not to publish the real name of the organization) is registered in Phoenix, Arizona. Their primary activity is the wholesale of plaids, bedspreads, bedding, and curtain fabrics. Additionally, the company is engaged in the sale of curtain hardware.
Problem 1: An organization cannot optimize the scaling process of their business because building relationships with new counterparties is a very slow process.
In total, a paid audit would take 15-20 days. All this time, the potential partner had to wait. Not everyone had time to wait, so Company A was losing money.
Problem 2: To speed up the process of interaction with new organizations, Company A hired two analysts. This reduced the verification period from 20 to 10 days, but another problem arose: additional costs. Keeping the specialists would cost $12,600 per month (with a salary of 6.3 thousand each) or $151,200 per year.
Objective: To optimize cooperation with counterparties and reduce costs on finding new ways to market finished products.
Tasks: Verify the counterparty with minimal money and time costs.
Situation: Company B contacted Company A to order a large batch of plaids and curtain fabrics. Company A decided to conduct an internal audit using the Datapo service, instead of a traditional paid audit.
As an experiment, they bought a trial package of Datapo for $79. Using the service, it was possible to solve the following problems:
The verification process of the information above took only 30 minutes. About the same amount of time was needed to organize and study the outcome.
In a few hours, Company A managed to uncover all the details about its potential partner: Company B. Top managers carefully studied the reports and decided to conclude a cooperation agreement on the same day.
The verification was conducted without the involvement of outsourcers and a special staff of analysts. Savings in solving the problem throughout the year amounted to $151,200, since a department of two specialists in the field of due diligence cost the company monthly $12,600.
Details of the case are given in the comparative table below.
|Resources||Own department||Outsourcing||Datapo Verification|
|Money||$151 200 annually||790$ annually for basic package|
|Time||7-10 days||15-18 days||30 Minutes|