Overcoming the Challenges of Outsourcing: Understanding the Benefits
Organizations are becoming more interested in the benefits of outsourcing but there is also an increased focus on challenges. Understandably, businesses have fears when first investigating outsourcing as a strategy.
In this guide, we will break down the key points of a successful outsourcing strategy and address some of the key risks and misconceptions.
Understanding Outsourcing
When thinking about outsourcing, we are referring to the recruitment of specialist staff to meet a business need. However, outsourcing organizations often recruit staff in different countries such as the Philippines, Vietnam, and India.
By outsourcing roles, companies can access a vast pool of talent that may not be readily available to them. This ability has led to the increased popularity of outsourcing, by enabling organizations to access skilled staff.
The focus then shifts to what functions are right for outsourcing and how organizations can increase productivity. Outsourcing ensures high-cost teams such as sales or account executives are spending more time with clients.
Utilizing outsourcing can help companies reduce costs and improve operational efficiency. Selecting the right partner will ease the burden of setting up all the back-end infrastructure required when bringing on new staff. The support offered and the ability to partner with a trusted organization to drive business growth
The Basics of Outsourcing
Outsourcing includes a wide range of activities, including customer support, data entry, bookkeeping, and marketing. It involves agreeing with a third-party provider who assumes responsibility for delivering the outsourced services.
Selecting the right partner is critical, and there are several different things to look for when selecting a partner.
The first is the specialist niche a particular provider operates in, some outsourcing specialists focus on marketing for example. These partners might be right for specific functions related to websites EDMs or other marketing campaigns. Alternatively, the sectors in which partners operate, such as the financial services industry. This field of expertise can provide valuable support in achieving business objectives pertaining to financial services operations or customer satisfaction.
The second is certifications and data protection policies. Globally recognized certifications such as an ISO Certification or data security scores like a high Microsoft secure score. These particular credentials provide you with confidence in a prospective partner’s capabilities.
The third is research related to the company. Investigate their website, ask for details of any credentials, and conduct thorough research. Another good idea is to engage any prospective partner directly and ask them to address any questions you have.
Once you have a suitable partner in mind, establish a clear line of communication. Be clear when outlining the scope of work and your expectations. The objective is to ensure alignment on deliverables and minimize any misunderstandings.
Identifying Concerns About
An effective outsourcing strategy can have many potential benefits, but when taking the first steps many businesses have reservations. Understanding these concerns and what they mean for you will help guide any decisions regarding partner selection.
Common Misconceptions
One common misconception is that outsourcing results in job losses. This is possible but in reality, the focus is more on creating new opportunities for a business. A well-constructed strategy will enable realignment of internal teams, allowing them to focus on high-value tasks. Overall your business and customers should benefit greatly, which is what is most important.
Another relates to security, which varies depending on the type of outsourcing arrangement and partner you select. As mentioned above there are several certifications or credentials that you look for. The global standard is an ISO certification, others include reviewing the Microsoft Secure score or GDPR compliance.
Any partner you engage should provide you with a complete guide on their data protection and disaster recovery plan.
Addressing the Risks of Outsourcing
Like with any major business decision, there are risks and challenges. With staff working from another country, there are likely some challenges regarding language and cultural differences. You can effectively manage these challenges through choosing the right partner, and clear and frequent communication.
Location is a key factor, by working with a partner that operates in a country focused on outsourcing is a great way to start. Other factors such as English proficiency or cultural alignment can also make getting things started easier.
The objective of your chosen provider should be to work with you to establish a clear framework that meets your needs. Supporting you by guiding you on working hours, public holidays, and equipment setup.
When it comes time to onboard your staff member you should be comfortable in the decision you have made and the expectations set.
Strategies for Overcoming Outsourcing Fears
Like bringing on any staff member, preparation is key. Setting up a plan for a staff member’s first day, week, month, and beyond is important. Your chosen outsourcing partner should be on hand to assist you with this.
Some key points for consideration are:
Clear communication with multiple channels, email, video calls, and instant messaging are great options.
Onboarding on Day 1: Having some time set aside to onboard your new staff member is critical. This session should also outline work expectations, specific company information, and how to communicate.
A 30/60/90 Day Plan: Thinking about the role, what are you going to set as key performance indicators? Three sets of targets at 30, 60, and 90 days is a way to structure this.
Support from your partner: Your selected partner should have a range of support services for you to tap into. From getting the right software and programs installed on your staff members’ computers to working with HR to outline pay and holidays. Your partner is there to support you, so ask them for assistance when you need it.
Building Trust with Your Outsourcing Partner
As with any relationship, Trust is essential. Every business is different, particularly when it comes to outsourcing. Some businesses are highly experienced and others are taking their first steps.
Your partner is there to help support you no matter what experience you have in outsourcing. Having open and honest conversations with your preferred partner will allow them to meet your needs.
Establish open lines of communication, maintain regular contact, and foster collaboration between your team and the outsourcing provider. By building trust and transparency, you can overcome initial fears and foster a successful long-term relationship.
The Benefits of Successful Outsourcing
Cost Efficiency and Flexibility
Outsourcing can significantly reduce operational costs by leveraging lower labor costs in different regions. It also enables organizations to scale their operations based on business needs.
Like any role, the requirements and expectations of the role will impact things like salary. However, ensuring your expectations match what you are looking for should result in the ideal outcome.
Access to Global Talent and Expertise
The main driving force for the rapid growth of outsourcing is the ability to access a vast talent pool. Accessing this talent pool can become your competitive edge, as there should be multiple qualified candidates to select from.
Steps to a Successful Collaboration in Outsourcing
In this article we have covered a lot about outsourcing, in summary, the key points always remain the same;
Choose the right partner. There are different service models offered and the two most common are either function or industry. Some providers specialize in completing a specific task, for example, service desk or marketing. Other providers find staff based on client needs, with expertise in a specific industry, such as financial services.
Research. Read blogs like this, and talk to providers to learn about their offerings. Confirming adherence to particular standards is also important, like ISO certification. Involvement in business communities or associations related to your industry is also a good sign of fit.
Be proactive and clear. Set your expectations upfront. This enables you to work through your requirements with a provider and ensure your expectations are realistic.
Prepare. Be ready to bring on a staff member. Prepare a 30, 60, 90-day plan and onboarding material. Set targets and communicate them. Share your plans with your outsource provider so they can support you in meeting them.
Regularly review. Adjust the outsourcing strategy as needed to ensure that it aligns with your evolving business needs. Maintain ongoing communication, address any emerging challenges promptly, and celebrate project successes together.
With the right partner and the right plan outsourcing can work for any business.
If you would like to discuss this further or need any help with outsourcing then please contact OBS here or download our 10-point checklist here.