The Rise of Business Process Outsourcing

We are at a unique stage of economic evolution where technology, organisational development, and human capital align to provide notable productivity gains and value creation opportunities. Now more than ever, organisations need to be adaptive and agile. Very few sectors require organisations to have complete vertical integration of their functional areas. The need to put focus on channeling energy and resources towards core expertise is critical in the current competitive environment.

Business Process Outsourcing has been used as a scapegoat by protectionists and others with various nonsensical agendas. However, outsourcing is a precision tool that organisations can use to gain a strategic advantage and grow the overall value pie, which in turn addresses the majority of the complaints against outsourcing, such as job losses and knowledge drain. Organisations have realised the importance of outsourcing and are now moving towards understanding how to utilize it more effectively for their specific delivery areas. The key for organisations is to understand their consumer base and pair it with their critical offerings from a position of strength. This execution can be further enhanced if non-core functions are outsourced to trusted partners who understand the organisation’s ethos and value proposition. A true outsourcing business partner will strive to understand their service or product’s impact on the client’s value chain and ultimately on their end consumers. This creates agility within organisations and increases an organisation’s capacity for change and growth through more adaptability. Outsourcing can serve as an essential means to leverage global talent, harness cost benefits, and enhance quality as we move into distributed team models that span multiple geographies. Many organisations aren’t yet set up to make the most of global human capital, but they can ease into this direction through strategic outsourcing engagements. There are several factors that organisations should consider when evaluating potential outsourcing partners in order to ensure a symbiotic partnership.

One Size Fits All

The larger, one size fits all outsourcing providers are rarely viable in the current era of customisation and consumer demands. Outsourcing partners should be able to provide boutique, custom solutions that are adapted around their clients’ business models. The outsourcing delivery model should have a solid foundation but have upper service delivery layers which can adapt to client specifics. It takes evolutionary growth for a service provider to get to this stage which involves building up their capabilities over a certain period through high service levels and adaptive learning.

Knowledge Process Outsourcing

The service provider’s front end is crucial as this is where the organisation’s interaction will happen. However, partners should be assessed on both their depth of knowledge in specific outsourcing areas as well as knowledge management. It’s important for service providers to properly manage and house their knowledge pools and minimize risks associated with knowledge loss. This is especially relevant for service providers who are serving as area knowledge partners for their clients. Knowledge management has to be a 360-degree approach, and the service provider should have mechanisms in place, so main stakeholders have access to their knowledge pools efficiently. In addition, a partner’s service delivery model should be configured to efficiently harvest knowledge elements and insights from existing cases and add them in an organized manner to the overall knowledge pool.

Scalable Technology-Driven Solutions

Technology is an accelerator and enabler for most organizations. It helps accelerate learning, enhances the customer experience, and creates efficiencies if appropriately utilised. Organisations need to find the right blend of technology with technical, area-specific expertise in a partner. The partner should be able to use technology elements to enhance the value of their service delivery and create a sustainable value advantage for their client. In an ever-changing environment, the service delivery partner should have the right infrastructure in place to provide compliant, technology-driven solutions for their clients and adapt technological advances into their service offerings on an ongoing basis. A partner’s stagnation in this space can severely reduce clients’ competitiveness.

It has become paramount that the need to adapt evolutionary models such a Business Process Outsourcing or Offshoring, for that matter, can become a make or break move for organisations. Survival of the fittest is at its most competitive post-pandemic, and if organisations fail to realign strategies, they risk the wrath of their competitors. Selecting a competent partner with a proven global business reputation offers peace of mind and ROI in the long run.