Outsourcing: Can it work for you?
Outsourcing can reap great benefits, allowing organisations to focus on strategic priorities, support growth and improve margin, performance and customer satisfaction. However, it is also a strategic undertaking fraught with risk.
3 WAYS TO ASSESS WHETHER OUTSOURCING CAN DELIVER BENEFIT FOR YOUR BUSINESS
- What are our core strategic competencies? So you understand what might be strategically appropriate to outsource.
- Which parts of our business are at the right scale and outsource ready? So you select those with the greatest benefit and most likely to succeed readiness.
- What do we have the capability and capacity to deliver? So you pick those you have the leadership, transformational management and operational management capability to transform
At the heart of any decision making should be your ability to deliver benefits from the outsource.
Usually, organisations outsource because it provides improved opportunities for GROWTH, INCREASED EFFICIENCY AND EFFECTIVENESS and an IMPROVED cost base. However there can also be other reasons more specific to an organisation’s circumstances:
- Free-up capital for investment
- Rapid quality improvement and knowledge acquisition
- Improve customer satisfaction and accountability
- Rapid, platform-based growth
Naturally, back office and support functions have been a primary target for outsourcing, as outsourcers have developed the capability to deliver high service at lower cost than many organisations can achieve. Also, with the proliferation of online channels and “service me now” customers, more organisations are outsourcing front office transactional customer contact. Other elements of the core value chain are also prime candidates where an outsourcer can provide scale across many businesses, especially of a niche aspect of the value chain – e.g. Goods Not For Resale – are beginning to emerge.
In our experience, we find there is a strong precedent for outsourcing many portions of any business.
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