4 Es of Outsourcing

Business outsourcing is a successful and growing global trend. According to a 2014 Grant Thornton survey, 40 percent of worldwide businesses either outsource now or are planning to do so. Despite reports about attempts to nearshore or reshore, offshoring outsourcing continues to be “alive and well.”

Recent advancements in the IT industry have had a positive effect on the business world.  As better systems are being designed, and service outputs are becoming more advanced, related companies and outsourcing specialists have been working in conjunction to become more streamlined.

Do you currently outsource? Are you thinking about outsourcing? This Back-Office Pro article describes the 4 Es of outsourcing — Efficiency, Economy, Experience, and Engagement.

The 4 Es of Strategic Outsourcing

Below the four Es of strategic outsourcing is discussed:

The First E — EFFICIENCY

Does outsourcing increase efficiency? If you outsource to cut costs and improve the efficiency of your business operations, you are in good company — this practical bottom-line motivation currently drives 53 percent of manufacturing companies to offshore outsourcing. However, being efficient includes much more than cutting costs. Getting things done more quickly while also freeing up your internal staff to concentrate on core business tasks will also contribute to better business efficiency.

Based on the Grant Thornton survey, the positive impact of outsourcing often depends on business size. 

For example, in smaller companies, 48 percent use outsourcing to ensure business continuity; 58 percent of larger enterprises outsource to improve efficiencies and reduce costs.

Improving efficiency is always critical in a competitive business environment. Outsourcing can provide the extra push to gain an edge on your competitors. Several fields have already established a positive track record of increasing efficiencies via outsourcing — data entry services, creative services, research and analytics, engineering services, and transcription are five prime examples.

The Second E — ECONOMY

Strategic outsourcing can be a “Win-Win” proposition that improves economies in multiple countries. In an ideal situation, both “home” and “abroad” countries work together in a partnership fashion to make this arrangement successful for everyone. In an early 2015 example, the leaders of the United States and India met to expressly make outsourcing more viable for all parties.

The economic benefits of outsourcing are revealed in several ways that contribute to a higher standard of living for all parties. In the “abroad” country where tasks are outsourced to, valuable jobs are created. In the “home” country that originates the outsourcing decision, consumer costs are frequently reduced, and investor profits are often increased as a direct result of outsourcing strategies.

The Third E — EXPERIENCE

Finding an experienced outsourcing partner such as Back Office Pro is always desirable — but it becomes almost a mandatory consideration when your company is outsourcing for the first time. For example, concerns about security, quality, and risk are typically expressed by companies in the early stages of an outsourcing decision.

With an outsourcing company that truly has a “track record” in the global business community, these issues can be quickly dissipated. Make sure to do your due diligence before finalizing any outsourcing decision or contract — don’t “sign on the dotted line” unless you are comfortable that you are dealing with an outsourcing partner with at least a decade of experience.

The Fourth E — ENGAGEMENT

Engaging with your outsourcing partner regularly works both ways. You must devote sufficient time for effective business communication with the outsourcing company. At the same time, your outsourcing partner should also emphasize the importance of business engagement by making it as simple and straightforward as possible.

For example, Back Office Pro provides one designated point of contact and is available for customer support on a 24/6 basis. However, several key parts of the engagement process must happen at the front end of the project — understanding and communicating about issues such as objectives, scope, work processes, requirements, and customer expectations.

Looking at the Future of Outsourcing

Whether used to delegate tasks, enhance functions, or expand capabilities, outsourcing has become a strong platform, used by business owners around the world.  Supported by multiple benefits, including cost reductions, greater resources, and time management, many companies have begun outsourcing their tasks abroad, and with good reason.

Key Areas Where Outsourcing Services Will Emerge Towards 2020

Outsourcing services outside of an organization’s core priorities has been the standard for many years, including catering, cleaning, and debt handling. However, through certain industry movements, more core-focused tasks are being outsourced. These include:

• New Outsourcing Areas and Company Growth As businesses begin to outsource core functions like internal admin and project management, companies are overcoming structural constraints, pushing internal limits and raising production. By developing new system structures, and partnering with skilled professionals, greater platform development can be expected.
• Lead Generation and Innovation Through outsourcing, professionals are becoming better equipped to grow their concepts and approaches, with greater vigor in the workplace. New avenues are opening for a variety of businesses and can only get stronger and more rewarding in each industry.

Outsourcing Parameters to Become More Specialized

With technological advancements across all markets, outsourcing will expand into new service areas, especially in the IT industry. Companies with context-specific data and specific processing needs will provide a higher level of efficiency, especially with large data sets, integrated storage, analytics, and applications.

Increased Value-Added Experience Through Outsourcing

For companies to better adhere to specialized requirements, greater focus will be placed on service design, and quality, for existing offerings. This will be done through training and topic expertise, ensuring greater task satisfaction, and newer industry adaptations, like customizable project parameters, allowing for stronger input and output ratios.

The Future of IT Outsourcing VS Where We Are Today

The latest report by Gartner shows that IT spending is expected to rise up to $3.8 trillion in 2019, showing an increase of a 3.2 percent from the projected spending in 2018. With an average like this, these growths are expected to become more pronounced in 2020 and will have greater effects, including:

• Greater Need for IT Driven Outsourcing As industry requirements grow, potential lack of in-house IT specialists will lead to an increase in related task outsourcing. More companies will need specialists to ensure tasks are completed according to the expected standards. Examples of this could include data science and handling, remote IT services, and process automation services.
• Ever-Increasing Focus on Cybersecurity The demand for fully encrypted data sets is becoming more prevalent. Cybercriminals are increasing the risk of sensitive data. Ransomware and the threat it presents to published data and access blocking is leading many IT companies to seek multi-level security systems, with the help of outsourced Cybersecurity services.
• Automation Through AI As the use of virtual agents and ‘bots’ becomes more common in customer service assistance; IT outsourcing will need to increase to maintain these services. By creating the AI-enhanced system ‘bots,’ a company’s website will have a 24/7 response time that is not limited by human capabilities, language barriers, time zones, topic knowledge, or research.

The Importance of Outsourcing

Be it ease, increased efficiency, higher work ethics, or unparalleled expertise, by partnering with an outsourcing company, one’s targets can become limitless. Outsourcing business opportunities are multiplying each year, and the success shown by leading corporations can be seen as a testament to the overall importance of outsourcing as a necessary working tool.

Finding All 4 Es in One Outsourcing Company

Outsourcing can accurately be described as an ongoing journey — there can be unexpected stops and twists in the road as you proceed. Some outsourcing journeys will be longer and more complicated than others. For example, some outsourcing projects involve a series of different phases that include lengthy periods for planning, implementation, and execution that are followed by stable operations and transformation. In other cases, you might need a key short-term project turned around for a valued client on an overnight basis.

Whatever you want and need to accomplish on your outsourcing journey, here is a practical and cost-effective strategy — find an outsourcing partner that can successfully meet your expectations for the 4 Es (or Keys) described in this article. Back Office Pro is a noteworthy example of a renowned global outsourcing company that can do a worthy job in all four key areas.

When outsourcing, don’t leave anything to chance. Develop an achievable vision; define your requirements; agree on a value proposition and decide what you are looking for in a long-term outsourcing partner.

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-Backoffice Pro