Myths and Realities of Outsourcing
Firmly entrenched misconceptions surround outsourcing, and they are holding many companies back from maximising the potential benefits from this fundamentally important tool.
Despite misunderstandings and negative perceptions, the plain truth is that companies of all sizes can benefit from outsourcing, from one-man bands to major multinationals. Decades of experience across industries, sectors and geographic boundaries have generated a wealth of specialist expertise and made a wide range of services available to those seeking support. For this reason alone, it is worth exploding the myths and taking a long hard look at the reality of outsourcing.
The most common misconception is that outsourcing is all about labour arbitrage.
Most vehement critics will describe outsourcing is getting the same job done by a low cost labour. Yet this misses the whole point about adding value to a service by leveraging the expertise and resources of specialist external suppliers to the wider benefit of an organisation. Outsourcing enhances the capabilities of a company to deliver a service or skill set more efficiently and more effectively than could ordinarily be achieved internally.
If you are a CEO of a large company, with 400 people, it makes sense to have a separate HR Team. But in case of a small company, you may be unable to afford hiring someone with world expertise in HR.
One of the most invidious myths about outsourcing internationally is that it damages domestic business.
In today’s world economy, companies are always looking for ways to improve performance in order to release capital for the reinvestment needed for growth. To survive and thrive in this increasingly congested marketplace, businesses must remain competitive. Outsourcing gives businesses access to the best supplier services, fostering growth, which in turn benefits the domestic economy. Hence the question should not be local or global.
Today, outsourcing as a business process is becoming increasingly popular, with companies of all sizes typically outsourcing a part of their business.
In case of an accounting firm, which are providing local outsourcing services, believe that outsourcing business internationally damages domestic business. Where as outsourcing could help in freeing up employee time for more skilled work.
To maximise the positive impact of outsourcing parts of their operations, companies must set aside sufficient time and resource to manage supplier relationships effectively and maximise their value to the business.
Most of the large accounting firms and umbrella services providers have explored accounts outsourcing, bookkeeping and tax outsourcing services with outsourcing service providers/companies. Some of the successful companies have managed to build strong supplier/vendor relationships, to maximise their value to the business.
In this challenging economic environment, it’s time to cast aside the tired old clichés about outsourcing and seize the real benefits of an increasingly valuable business process.