We are in the middle of what many observers are calling the fourth industrial revolution; a digital and technological change so great that it will completely change the way we work, play and relate to each other.
Its scale, complexity and scope means that for all stakeholders, we must work together to deliver this brave new world. Billions of people all connected together through the internet with unlimited access to knowledge and technology, not to mention the emergence of artificial intelligence (AI), the internet of things (IoT,) robotics, and self driving cars to name but a few of the changes that are coming.
As a business, it’s an exciting and somewhat overwhelming time trying to keep pace with developments, and also ensure your staff have the necessary skills to deliver and plan for the future.
One way many businesses are coping with the demands of this transformation is by outsourcing work and functions to other organisations that have different skill-sets to their own, or that can deliver more agile working practices whilst companies up-skill their own teams.
Outsourcing can represent risk from the CEO’s perspective, including loss of control, loss of strategic capabilities and increased dependencies. However, managed correctly many businesses are getting it very right and seeing real value from their outsourced services.
As Steve Morgan, a key figure in the SIAM industry in the UK, said at the recent SIAM conference Service North in April “You don’t outsource your crown jewels”
What he meant by that was the tasks that you are good at, that you enjoy, and that are unique to your business are not necessarily the right things to outsource. You need to choose wisely!
So what are the benefits of and drivers for outsourcing?
With change inevitably comes staff skills deficits. By outsourcing business functions to a company that already has the capability, you can allow breathing space to get your team up to speed with new technology, business practices of whatever your skills gap may be. The problem many organisations have in times of change is that they are so busy doing, they can’t find the time to develop. Service suffers, and business is lost.
Seasonality of work, short staffing, recruitment issues, leave, and sickness can all leave you short handed at times. Outsourcing can give you access to highly trained employees quickly and for a specific timescale and cost allowing no drop in services to your clients.
With so many changes coming all at once it can be difficult for a CEO to focus on what changes need to take place, let alone how to implement them in a scaleable, planned but time efficient way. Business consultancy can be outsourced on an ad-hoc basis to help with planning and executing these changes, freeing up management time to be more involved with the staff and the business. During periods of change employees will find it much more comforting to have visible leadership in the organisation, and it frees up management to generate income and focus on business objectives.
Remember what is so unique about your business and why your customers love you so much? These are the things you need to be working on (remember the crown jewels analogy earlier!).
Outsourcing other back office tasks that are important but don’t have the customer-centric element to them allows better service without sacrificing the smooth running of the business.
That may seem a strange statement to make as you look at costs associated with outsourcing, but it can actually save you money.
Have you outgrown your premises but rents are sky high? Less staff in the building means you don’t need to move.
D you have departments that are large but not that efficient? Once you start paying for something like an IT tickets your staff will start to prioritise if their are more associated costs to raising it.
Do you need more staff but with basic salaries, benefits, pensions etc they are out of your reach? Outsourcing can be a cost-effective way to scale your team.
What to outsource
Most experts and outsourcing companies themselves would advise these areas as possible candidates for redeployment:
Highly repetitive tasks. Think accounts, data entry, IT helpdesk as examples.
Highly skilled (and not necessarily needed full time) CTO’s, Finance Directors, HR, Compliance.
Highly specialised. Tasks that are unique to your type of business and time consuming, so could be done by a best of breed supplier.
Once you have a plan in place and know what you are going to outsource you can put metrics in place to measure the success of the programme and select your vendor carefully based on these.
Seek recommendations from your peer network about people and organisations they have worked with.
“The secret of change is to focus all of your energy not on fighting the old but on building the new”