A wave of corporate entities might soon arrive at the conclusion that outsourcing some of their business functions is the best way to boost efficiency and cut cost. Following the heavy impact Covid-19 left on the global economy, entire governments and sectors have began looking for ways to reduce spending. Corporations everywhere had to make sacrifices and let many employees go, making it clear that every budgeted item must be a calculated, strategic move.
This best describes outsourced benefits; those are tasks and requirements your business needs and cannot function without, but are also items that might derail you from focusing on your core expertise, especially at a time when the primary focus must be on strategy, business innovation and reshaping both external and internal business structures.
Majority of companies today outsource their some of their business functions with IT services leading the charge. Those who still don’t are assessing feasibility to outsource while others are excelling their pace of outsourcing. Services that are outsourced are often in line with domains where talent is short. IT is a great example of this, considering the tech talent shortage. Outsourcing, in this case, solves many problems including cutting software development costs and utilising specialists.
In the era of the pandemic, tech giants compete for who can last longer working at home, proving that the model of large, physical offices is rapidly evolving towards more dynamic arrangements. There is the obvious question of the importance of interpersonal relationships through physical workspace for team building and overall business success, but at the same time there are very real examples of juggernauts of technology that were started by remote teams: WhatsApp, Pricena.
For WhatsApp, the case involved hiring an offshore Software Development team in Russia. As a startup, the now-global hit kept costs down by using outsourcing to create its product, while in the US, the teams managed operations and focused on customer support.
Post-lockdown economy will inevitably provide unique challenges and opportunities in the overall work environment and delivery. As a result, businesses are redefining strategies to reap the benefits of a dipping market and build long term strategic assets amidst the chaos. At the same time, plenty of newcomers are taking advantage of the trimmed-down competition to enter the market.
These small enterprises will need to introduce innovative solutions to existing market challenges as well as maintain their agility as a strategic advantage. This is where outsourcing creates value through a service type which allows them to focus on strategy and niche offerings. Your outsourcing partner deals with aspects of the business that often require entire teams to administer, while you deal with the intricacies of core business delivery in which your specialisation creates real value.
If you are doing business in the age of information, you will want your finance function to be outsourced. The finance function is critical to any business and has increasingly become a key strategic function as it provides insights which, if provided in a timely manner, can be the difference between success and failure. Repetitive processes within finance are prime examples of outsourceable areas.
Bookkeeping, invoicing and accounting are examples of what financial activities corporations need to stay operational today. Today, instead of hiring departments-worth of employees for each of these operations, enterprises outsource the entire financial operation. This allows them to allocate resources internally to higher functions such as analysis, forecasting and reporting.
Another great example of outsourceable business process is HR. HR is a business in itself and a crucial vertical among the constituents of business. The HR function has evolved immensely in the past decade to being more than simple people management. Successful HR departments are increasingly creating value through employee engagement, rapid analytics and reporting which are essential to staying agile and making quick strategic changes.
The importance of Human Resources came to the spotlight recently in Saudi Arabia, when what is basically now an HR ministry was born from the merger between the Ministry of Civil Service and the Ministry of Labor and Social Development. The Ministry of Human Resources and Social Development currently helps check points off of the Vision 2030 list, and was a key player in the Covid-19 response initiative. Companies are likely to outsource HR as it does require its own expertise and experience, especially with operational elements like operational design, payroll and staffing.
Today, it is ever more important for organisations to stay abreast to the ongoing changes as technology reigns wider and deeper into more areas of our work. Financials reporting, dashboards, payroll, leave management, administration of benefits and recruiting are on a still-expanding list of outsourceable business processes. When outsourcing becomes an automated practice, entities and partnerships merge into everyday business, and become part of a smooth budget pattern.
This cuts a lot of the stress related to repetitive or complicated operational elements which CEOs, business owners and managers need to break away from to focus on business goals. With the ongoing digitalisation, virtual work and access to outsourcing, we are now exposed to some of the greatest tools to doing business, and we are in a position to turn exposure into access, and that into value creation.
- Following the heavy impact Covid-19 left on the global economy, entire governments and sectors have began looking for ways to reduce spending.
- Outsourcing, in this case, solves many problems including cutting software development costs and utilising specialists.
- Post-lockdown economy will inevitably provide unique challenges and opportunities in the overall work environment and delivery.
- A great example of outsourceable business process is HR. HR is a business in itself and a crucial vertical among the constituents of business.