by: Mary Christine Galang
Wednesday, July 26, 2017 |
The decision to outsource your business process balances the needs and the risks that ultimately results in beneficial, sustainable growth.
Outsourcing has long proven to be a tremendous success for companies—small, medium, or large—across various industries. Innovations in technology and other business processes have further improved outsourcing as a whole.
Many inevitably turn to outsourcing to cut costs, perhaps the primary reason why it evolved to be an entire industry of its own. But outsourcing is more than just a cost-cutting measure. In the end, it must be wisely utilized as a competitive strategy.
Creating real sustained value and through maximizing the strategic benefits of outsourcing is the key. But before we arrive at that, let us first identify what are these benefits.
1. Building strong partnerships. Specifically, those that yield value and reduce risk. As with many things, outsourcing carries a potential risk when done poorly. A Forbes study suggested that companies that fail to receive a 25% return on investment should rethink and fix its current programs before going further. Choosing to have a third-party provider means shared focus, and it means exerting control is necessary. Your partnership must work not just for you but with you. Treat your external relations as a strategic extension of your domestic operations. That way, you will be fully equipped when unforeseen circumstances hit the market and limit its effect to your business.
2. Gaining access to global talent. Capability-sourcing is one of the smartest ways to frame your outsourcing needs. Having people from various backgrounds and offering a multitude of skill sets means applying their expertise to your business processes and increasing your company’s ability to grow.
3. Expanding to the local market. Establish your presence and create a network with local entities. Being proactive in seizing these opportunities allow you operate in large-scale operations in the local market ahead of your competitors. Furthermore, it is critical to boosting innovation in your business processes.
4. Disrupting traditional business models. Outsourcing allows you to focus on developing your core competencies and allocate non-core, often labor-intensive operations to your offshore partner. This will boost productivity, which is essential especially to consumer products companies, and at the end, makes for a flexible operation.