As the executive in charge of business operations, a Chief Operations Officer (COO) has a lot on their plates. They oversee the day-to-day business of running the company and see to it that everyone is doing their part to ensure everything is running smoothly and accordingly.
From customer service staff to the IT team, all the way up to the HR departments, it is the COO’s job to ensure that every department is making a contribution towards achieving company goals.
One of the best ways to keep operations running efficiently is through BPO outsourcing. From large multinational companies to small to medium-sized enterprises, more and more organizations have come to appreciate the benefits of hiring a third-party expert to help with business operations.
Here’s what you should know about outsourcing, and how it will affect business operations in the coming years.
1. Cost savings is a significant
Among companies that currently outsource, cost savings is cited as a major draw for their decision to hire a third-party contractor. This shouldn’t come as a surprise since it is practically common knowledge among business owners, where a Deloitte study shows that 79% of respondents do not believe their service providers to be too costly.
However, most people are under the impression that cost savings mainly come in the form of lower salaried workers. While that’s true, other areas help streamline resources as well.
One of these comes in the form of lower infrastructure investments due to movements to external locations. Certain functions and structural requirements are freed up and taken up by the outsourcer.
This is especially true in assets requiring substantial up-front investments, such as cutting edge technology, the state of the art call centers, and IT support systems.
2. Internal hires gain more expertise in their core functions.
Outsourcing frees up your current employee roster to focus on their core functions. When you redirect your internal resources toward core activities, they become better at what they do because they do more of what they were hired to do.
This also allows COOs to usher more of their internal experts to do more of the type of work that will have a bigger impact on any strategic goals.
For example, if the main goal is more profit, then those in the team who’ll be helping achieve that goal will be made to do those functions.
3. More companies plan to increase outsourcing activity.
Deloitte’s Global survey revealed that the top 3 industries currently outsourcing include IT functions at 53%, Real Estate Facilities Management at 25%, and 16% with HR functions.
Among those surveyed, up to 26% who doesn’t outsource say that they plan to do so in the future. This can be attributed mainly to technological advancements—particularly in the area of cloud computing.
4. Companies expect more strategic assistance from outsourcers.
BPO outsourcing companies are expected to improve their services by providing more value to the table, rather than merely following instructions to the letter.
Almost 50% of respondents to the Deloitte study said that they are facing issues with vendors being more reactive than proactive and that 37% are facing issues with lack of innovation.
This means that outsourcers should level up and provide service as partners who have gained expertise in their respective industries.
5. Outsourcing is not only for multinational corporations.
Small to medium enterprises have been coming into the fold when it comes to outsourcing. 39% of the respondents to the Deloitte Global survey come from company’s with revenues less than $1 billion—making up a majority.
26% come from companies with less than 1,000 employees while 31% have internal hires ranging from 1,000 to 10,000.
Majority comes from consumer and industrial products, financial services, and fields within the technology, media, and telecommunications sector.
Whether you’re a COO of a company with less than a thousand employees or more than 100,000, one thing’s for sure: outsourcing activity is here to stay.
Not only that, it is expected to increase in the coming years. Regardless of company size, the benefits and trends outlined above are bound to become the new standard sooner than later.