Thanks to outsourcing, many companies around the world have been able to optimize productivity, improve administrative processes and even avoid incurring additional operating expenses in order not to affect profitability. But have they really been able to attend and solve their pain points?
In our previous blog, Outsourcing: a strategic model that shapes the future, we highlighted how this model is giving many companies the opportunity to focus on what is really efficient for the business, without incurring in additional costs and without getting worn out in areas that are not strategic for their profitability. We also talk about who are the main players in the world’s outsourcing markets, what are the main targets and which sectors are the most outsourced.
This time we will look at the pain points that have driven companies to take on this model. It is not a secret that outsourcing has been positioning itself, especially in the technology industry. According to IDC, International Data Corporation which is one of the world’s leading market intelligence firm, it is estimated that globally the amount of spending on outsourcing services will reach USD $244.1 billion by 2023, $40 billion more than in 2019.
Although statistics are on the rise, it is important for companies to analyze whether an outsourcing model is really the solution to their problems. Recognizing in time if an extra hand is needed can be the difference between moving a project forward successfully or not. Therefore, the first thing to consider is which pain points need to be handled and which can definitely be solved with the company’s own infrastructure. For this it is important to be self-critical with statements such as:
- You have doubts about identifying the profile of professionals you need to optimize processes.
- Your team is not fully focused on the objective and there is no continuous improvement.
- People do not have sufficient capacity to adapt to challenging projects.
- Productivity has been affected or stopped because the staff is not specialized enough for the processes.
- The investment of money and time is taking prominence in tasks that are secondary to the core business.
- Some areas, not so strategic, are generating problems and affecting workflows.
- It is necessary to have better talent without incurring in the incorporation of personnel in payroll.
The statements can be several, or many, but all aligned to the different pain points that can occur within companies. The other important thing is to be clear about the model to be implemented, once the pain point has been identified:
- According to tactical or strategic objectives: it is outsourced for a specific task to reduce costs or a long-term relationship is built to constantly add external talent
- According to responsibilities: it can be a Co-sourcing model where it is agreed that both parties have responsibility for the project or Out-tasking where the tasks are performed outside the company
- According to where the work needs to be done: it can be In-house, where the work is done at the hiring company’s installations or Off-house where the work is performed at the outsourced company’s installations
- According to geographical location: it can be Offshoring which is when a company is outsourced to a foreign company, Nearshore which is when an agreement is reached with a nearby country and finally Onshore which is when both parties are located in the same country
The truth is that, despite having clear objectives, it is also good to emphasize that there is no one magic recipe that solves everything, remember that each company is a different world, and each company has different ways to find a solution that fits precisely to their needs. But there are certain points where they have a common ground, especially on why to take the decision to outsource.
According to a research done by Westcon Comstor, a firm specialized in business technology, the 3 main reasons why companies decide to adopt a technology outsourcing model are: 26% for cost reduction, 21% for quality improvement and 19% for access to new resources.
Whether it is for cost reduction, quality improvement or access to new resources, it is clear that innovation and development are objectives for almost all companies. A growing company that wants to function properly and conquer new markets must have an experienced technology partner.
In order to choose who to work with, it is also important to make a previous analysis of potential suppliers to verify if they have key aspects that generate security and confidence, such as:
- Regulations: the company must ensure compliance with the laws where it operates. This is to avoid legal problems that may affect the continuity of the projects.
- Guarantees: validate that they have the necessary and adequate resources to ensure that the operation is in line with the company’s plans.
- Level of professionalism: verify that the resource has the capacity and adequate knowledge for the fulfillment of the projects without incurring in reprocesses related to learning curves.
- Transparency in the agreements: it is necessary that they give a part of confidence, verify that they have complied with the conditions, agreements, and times with other companies with which they have worked.
- Quality level: be sure to make it very clear which are the promised quality standards of the service to be delivered. Also make sure that there is constant communication so that both parties are always aligned, this is the only way to obtain the expected results.
- Fair prices: verify that the agreed prices justify the contracted resource. It is important that people deliver the added value promised by the company providing the resource.
Having a complete and detailed context, in addition to clearly understand that the world is increasingly oriented towards Globalization, in fact, outsourcing is a strategic move that adds a lot of value to your business. No doubt it is an effective tool to expand your company’s capacity to provide services or products, without the need to add structures to your own business.
IT Outsourcing is one of the solutions that Interfaz offers to companies to solve problems and issues related to software and technological tools to manage the processes of any type of business.
At Interfaz, more than a company, you find a co-equipment partner that has the regulations, guarantees, level of professionalism, transparency, quality and fair prices you are looking for. Remember that working with an ally that seeks to turn your ideas into business opportunities, guarantees that your company will gain scalability.
Resources: Pain points of outsourcing | Science Direct Outsourcing reasons and risks