Outsourcing non-core functions in a CRC

Posted on Aug 4, 2010 in Records Management News

This arti­cle was included in the Cincin­nati Busi­ness Courier and con­cerns Frank Albi’s belief that out­sourc­ing none– core busi­ness func­tions adds to BIS’ success.

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Com­pli­ments of File­Man Research

BIS: $3M in sales, zero employees

Jour­nal­ists rarely for­get their first big scoops, which we reporters define as an exclu­sive story acquired by luck or ini­tia­tive before a com­peti­tor. I’m no excep­tion. In my first few weeks at the Courier in 1987, I reported that WLW and WEBN would move to Mount Adams from down­town. In the sec­ond edi­tion of the Busi­ness Record dur­ing the sum­mer of 1988, I reported that then eight-year-old Busi­ness Infor­ma­tion Stor­age, Inc. would buy Lesh­ner Corp.‘s giant Queen­gate build­ing adja­cent to Inter­state 75 — end­ing wash­cloth man­u­fac­tur­ing and 100 jobs there.

I was reminded of the BIS story recently at a recep­tion for the nearly 50 final­ists for the 2010 Fam­ily & Pri­vate Busi­ness Awards, where I ran into BIS founder Frank Albi and was in-troduced to his son, “Lit­tle Frank,” or “Tank as he’s known, one of his three kids, whom are involved in the business.

Albi bought the 120,000-square-foot Queens­gate plant because he was run­ning out of room at his 32,000-square-foot head­quar­ters on Third Street down­town. In the late 1980’s the com­pany was expand­ing rapidly, hit­ting the 400 cus­tomer mark (up from 300 in the prior year) with 250 mil­lion doc­u­ments and 33,000 com­puter tapes need­ing a home.

Albi is com­pet­ing in the 25–49-yearold busi­ness cat­e­gory at the Aug. 24 event at Music Hall (tick­ets are-still avail­able at (www.cincinnatibusinesscourier.com). But in my book he’s already a winner.

Despite the Iron Moun­tain “roll-up” (acqui­si­tion of records man­age­ment “mom-and-pops all over the coun­try) that took place do dur­ing the 1990’s, sev­eral eco­nomic down­turns and the 2003 entry into the records man­age­ment busi­ness by Cin­tas Corp., BIS con­tin­ues to sur­vive and thrive as a clas­sic local small-business suc­cess. I asked Albi that night how many employ­ees now worked for him, and his reply — zero — was a surprise.

At nearly $3 mil­lion in rev­enue, Albi explained that he believes much of his company’s suc­cess has had a lot to do with how far it has gone in out­sourc­ing busi­ness func­tions in which it does not have core com­pe­ten­cies — includ­ing human resources.

“All 21 of us, includ­ing me, are leased,” he said.

Employee Man­age­ment Ser­vices, a divi­sion of local giant CBS Per­son­nel Ser­vices, han­dles all of BIS’s human resources. The rela­tion­ship started after Albi was sued in 1991 by an employee who was laid off after BIS lost its then-largest account.

“I’m an Eagle Scout,” Albi said. “I never dis­crim­i­nated against any­body. The EEOC (Equal Employ­ment Oppor­tu­nity Com­mis­sion) found there was no dis­crim­i­na­tion. When they dis­missed the com­plaint, he hired a lawyer who sent me a let­ter say­ing I could avoid being sued if I would agree to pay his client $5,000 to $10,000. I refused. It took me nearly four years and $118,000 in legal expenses for me to get the suit dis­missed. Upon learn­ing that I could hire EMS to han­dle HR for me and they would defend any future law­suits, I signed up.”

BIS is grow­ing at a double-digit rate in elec­tronic imag­ing ser­vices. BIS is among some 4,500 family-owned busi­nesses with at least five employ­ees and more than $1 mil­lion in rev­enue in Greater Cincinnati.

Doug Bolton is pub­lisher of the Courier