Business Challenges That Outsourcing Can Address
Blog: MattsenKumar Blog
Industry veterans refer to outsourcing as a perennial service that is not bound by seasons, it continues to serve its purpose throughout the year. Even after being in existence for decades, the business process outsourcing industry continues to grow with an impressive CAGR of 8%.
Supposedly, if we translate BPO’s growth in the last three decades mathematically taking 8% as an average growth then a sum of $100,000 invested 30 years ago will be worth $1,006,265.69. That’s a wealth creation of $906,265, which explains how much valuable outsourcing holds.
Initially, outsourcing was adopted to reduce work pressure on key stakeholders, with time it got translated into a methodology that saves money but today it is additional support that works as an edge against the competitors. Today outsourcing is leverage for multiple things including:
- Ensuring the epitome customer experience
- Benchmarking against industry standards and direct competition
- Developing additional skills to cater to a wider audience
- Ensuring compliance and safety of data servers
Business Challenges that Outsourcing Can Address
Successful entrepreneurs like Steve and Richard Branson have advocated “finding problems and offering a robust solution” as the key to building long last businesses and eternal wealth. Business process outsourcing does the same. Industry leaders are using available technology and methodologies to discover the burning problem. Once the problem is discovered, the players are using the underlying expertise and technology to create a solution that is both scalable and profitable.
While the industry continues to grow and offer better services, here are burning challenges that Outsourcing solves for SMBs as well as Fortune 500 companies:
1. Make Quality Resources Affordable
56% of small businesses agree to outsource more than one process in the coming years. Small businesses run on limited capital and they really cannot afford to have in-house resources to do intermittent things. Similarly, bigger organizations have a huge employee base and to administer their payroll on time will require another hundred employees, which is not just expensive but also frantic and time-consuming.
With outsourcing both small businesses and industry leaders get their work done on time by paying less and without needing to maintain an additional payroll management arm. The rapidly expanding global economy requires organizations to be light-weight so that they can move fast and get more things done. With lesser employees, it is easier to ensure the effectiveness of the message and get quality work done.
2. Allow Stake Holders to Focus on Important Tasks
While cash-starved start-ups will try to take everything on their platter trying to reduce cost and increase effectiveness, which may sound a go route but in the long run, it is undermining the value of moving fast and creating big things in small periods.
Start-ups generally build their business on a patented tech or unique problem-solving paradigm, which requires immense focus and work. By leveraging outsourcing for mundane tasks like lead generation and marketing, start-up founders can ensure their improved dedication towards tech improvement or process refinement.
Some of the top start-ups that relied on Start-up for administering faster growth:
Slack: A leading instant messaging app for workplaces outsourced its app design and marketing and benefited immensely from it.
Skype: Skype was started as a simple idea and then built into a full-fledged peer-to-peer messaging network with the help of outsourcing. While start-up founders are willing to do everything on their own, Skype founder was courageous to outsource the main website development task. It was valued at $2.5 billion when eBay acquired it.
AppSumo: The founders outsourced the development of the platform and started making the company cash positive by putting up ads for $50.
3. Automates Team Management
All successful organizations believe in having a “process” for everything. They rely on these meticulously created processes for getting through their day to day tasks effectively. Be it hiring, employee training, or responsibility management, all things are handled through well-defined processes.
Varied tools like ERPs and CRMs have simplified tasks and allowed organizations to have lesser employees to do things manually but hiring, training, and employee management continue to be something that requires human expertise.
To hire the perfect employee, ensure effective training, and reducing attrition requires expert help, while organizations can always develop in-house teams to carry these tasks but outsourcing makes more sense because:
- The hiring and training are not something that happens on day to day basis
- Training and employee-related activities occur with defined intervals
- Often these require content creation, system building, and surveys, which is hectic
With outsourcing organizations can hire, train, and manage employees without worrying a second about it. BPOs have developed the requisite skills and are in constant touch with freshers and experienced individuals with relevant skillsets, which simplifies hiring and training tasks. These services are quite affording as well, 10-15% of annual CTC is what a proficient BPO will charge you for helping you hire the right talent.
4. Onboard Diverse Skills for Problem Management
Let’s try to understand this pointer with the help of an example. Consider, Smith wants to build a valuable “mattress online store”. The first thing Smith needs to do is start with market research, followed by website creation, then adding sellers with relevant product and marketing it.
While all the points mentioned above requires expertise, Smith somehow manages to do these on his own. Going forward, Smith wants to receive payments on his online store, for that he will be required to furnish PCI DSS Certification. If Smith wants to improve the content on his platform to help customers make an informed decision, he will be required to hire content writers and get fresh product descriptions written. Also, Smith wants to offer improved customer experience and incomparable customer service, he will be required to hire people who are proficient with e-commerce paradigms and customer service rules.
While Smith is a very talented entrepreneur with a go-getter attitude, he really cannot do everything on his own. Here’s outsourcing can help:
- Compliance: Cybersecurity experts are offering PCI DSS, ISO, and HIPAA compliance services making it easier for e-commerce platforms to avoid fines.
- Content Management: BPOs are now catering to e-commerce players with additional zeal because it has multiple projects for them. Catalog management when outsourced can have a positive impact on the site’s search engine presence as well as improved decision making.
5. Make Data Management Easier
If we take a cue from organizations that processes important data like social security, credit card, and other government ids, then here are the problems they face:
- Inefficient management of data leading to errors in the final result
- Bad reputation as the cause of data misinterpretation
- Risk of being exposed to external attacks
- Attempts of internal sabotage for personal gains
- Server misconfiguration leading to data exposure
All these prime challenges can be handled by industry experts by puncturing a hole in the organization’s pocket. Various BPO agencies are offering data management and data security services at affordable rates. While data management service providers rely on
- Artificial intelligence
- Insightful dashboards
- Machine Learning
Data safety service providers ensure safety by
- Working under a framework developed by varied compliances
- Ensure round the clock monitoring through Security Operation Centers
- VAPT, which identifies and closes all loopholes in the system
6. Simplified and Insightful Reporting
Multiple thriving organizations failed to maintain their growth momentum because they flunked the underlying suggestions and insights of data collected. Often organizations overlook the underlying message of data that looks big on the outside.
For example, e-commerce players that are burning VC money on customer-acquisition fail to understand that customers are attracted to them because of additional discounts and not primarily because their platform is good.
Outsourcing organizations are now helping popular brands make sense of heavy data collected from multiple touchpoints. These BPOs are now using benchmarking tactics and other improved technology like AI, ML, and Insightful dashboards for creating and reporting insightful information.
7. Ensuring Compliance at all Level
Compliances are challenging not because they are tough to acquire but because it is extremely tough to remain compliant. Here are the underlying challenges with compliance:
- The norms are continuously changing
- The software and hardware require a quarterly upgrade
- One big data breach in any part of the world can coax you to overhaul your entire IT infrastructure
- Round the clock monitoring is required
PCI DSS compliance consists of 12 recommendations that every organization needs to fulfill. Also, organizations are required to upgrade software and hardware as per the latest guidelines every quarter, that is like 4 times every year.
If organizations decide to furnish and maintain compliances on their own, they are like to spend 4-12 weeks every year doing it. With outsourcing, these tasks are completed in the background without disturbing the day-to-day processes.
8. Assist With Technology Adoption and Movement
Organizations realized the importance of Business Continuity Planning when COVID-19 rendered their lavish workplaces useless. Organizations that had maintained robust BCP easily transitioned their employee base to remote working and minimized the downtime.
Technology adoption and movement when implemented by the internal IT team is exposed to challenges like
- Lack of information on challenges that occur during movement
- Heavy downtime expected
- Expensive because additional resources are not available in-house
When technology adoption and movement is outsourced
- Industry experts with the required tool and expertise carry the task with disrupting the day to day process
- The downtime is scheduled when customer requests are at the lowest level
- They use professional tools to carry out the tasks
- They are well aware of underlying challenges and have requisite measures in place to tackle them
400 unicorn start-ups worth more than $1000 billion are battling to impact the lives of common people. While a lot of these start-ups are going to merge and create a monopoly, many will pivot and introduce a completely new service.
No matter what the founders and CEOs of these start-ups decide to do, they will need partners to carry these out. Outsourcing organizations from around the world are constantly improving themselves, adding new branches to their skillset, and creating tailored solutions for businesses.
The BPO trends like Omni-channel customer service and involvement of AI and ML in customer service are proving game changer. Start-ups that are trying to do everything on their own need to break free of the comprehensions and try outsourcing.