Outsourcing has grown exponentially over the last decade as the primary response to events that changed the global business environment.
As businesses continue to struggle with the after effects of recessions, layoffs, political unrest, social and climate change, corporate strategies have shifted resources toward streamlining costs without compromising productivity.
Outsourcing has been proven to be an effective process to accomplish both cost management and revenue generation concerns of business.
Partnership Or Purely Platonic Outsourcing Models?
By outsourcing, a company can capitalise on the comparative cost advantages prevalent in another region or country. Economies of scale create greater value and added savings if a company integrates services in an outsourcing framework.
But outsourcing is more than just an effective process to reduce costs. It can contribute significantly to the revenue generation programs of the company if more value can be derived from the arrangement.
The question to be asked by the client company is: Should we move the outsourcing contracts toward a partnership agreement or keep things platonic as a purely working engagement?
In the context of this article the idea of transitioning to a “partnership” is only in approach and not in structure. It is not in the legal corporate definition of a partnership but rather how each party to the contract views the relationship and business strategy.
The “First Party” remains the “Client” who remunerates the “Second Party” or the “Outsourcing Company” for services rendered during a specific period.
The Purely Contractual Agreement
Companies that decide to outsource can be easily blinded by the amount of cost savings potentially generated. After all, based on the cost of labour alone, outsourcing can reduce operational costs by 50%.
Companies that focus only on offshore outsourcing as a tool for reducing costs are commoditizing the process and will fail to optimise its true value.
Generating cost savings should form part of the outsourcing solutions strategy but it should not be the main focus. Otherwise, the primary criterion for selecting an outsourcing vendor is pricing. Qualifying your outsourced services vendor on pricing will produce lower costs but it will not guarantee you quality of work.
The Partnership Approach
The idea of adopting a “partnership” perspective into the working arrangement with outsourcing providers may introduce more value than just a regular working engagement.
In business, a partnership requires both parties to contribute their resources whether in terms of funding or core competencies proportional to the distribution of equity.
But the deeper connotation of an outsourcing strategy partnership is in having a shared interest in the success of the enterprise. Both parties recognize the relevance of the venture succeeding and will exert every effort to make sure goals are met to create successful outsourcing relationships.
A partnership is a dynamic relationship; the parties do not approach work monotonously and jointly look for ways to improve the system and ensure progressive returns.
A typical working engagement runs its operations by the book; it is stagnant and does not strive to make things work better. It is a myopic relationship that runs only on a compensatory system of payment for services rendered.
If payment is delayed, service is discontinued. But in a partnership, negotiations are always open. The outsourcing provider remains a creditor but he will extend credit for a longer period of time to accommodate his partner.
How Does A Partnership Work For An Outsourcing Arrangement?
Adopting a partnership perspective becomes crucial for arrangements between clients and service providers from remote locations. A client that merely adopts and sustains a purely working engagement between it and the service provider will effectively disregard cultural and social nuances.
This type of mindset limits the perspective of the client and overlooks the potential contributions an outsourcing provider can deliver for knowledge process outsourcing.
Clients need to wean themselves of biases and preconceived notions nurtured by unsubstantiated facts or research available on the internet and hearsay from likewise close-minded people.
2014 surveys conducted by research engines like Forrester show there is a growing trend toward specialised outsourcing solutions over conventional outsourcing solutions.
The ascending trajectory of this business outsourcing trend is further proof that companies are looking past the cost benefit of outsourcing and toward its ability to improve profitability by addressing the revenue component.
Thus, private companies are beginning to outsource more technical and sensitive core business activities. The approach to meet this end should be anchored on trust and transparency; both essential qualities of a partnership.
Best Business Practice For Outsourcing Efforts
Most service providers in the outsourcing service industry, both for offshore and domestic outsourcing, tend to focus only on becoming the outsourced provider of certain tasks. There’s very little effort made to make your new virtual assistants part of your team and success story.
Here at OutsourceWorkers, we have a proven process and track record for creating successful partnerships with Australian small and medium-sized businesses, and we have outsourcing industry experts on standby to make finding your next virtual assistant hassle-free.
Step 1: Identify Repetitive Business Processes
Many business owners know they need help to free up their own time and allow their employees to focus on more dollar productive tasks.
But many don’t have a clear picture of what internal processes are the most mundane, time-consuming, and non-dollar productive.
So, the first thing you need to do with your employees is a time audit to see where you are wasting the most amount of time. You can also talk to our team for some advice on typical tasks where our clients have seen the best outsourcing results.
Essentially, the more repetitive the tasks of your in-house team are, the more suitable they are for outsourcing.
Step 2: Identify The Specialized Skills
Once you have identified the processes, it’s time to look at those business functions and identify what kind of skills and experience you need from a VA.
This will very much depend on whether you need help with data entry, lead generation, email marketing, or even application development projects. This is also a step that our team can help you with, as we’ve helped find ideal VAs for many industries and companies based in Australia.
It’s a critical step that can make or break the outsourcing experience of small businesses.
Step 3: Outsource The Hiring And Training Process
Hiring employees is not an easy thing to do. And with VAs, you have the added challenge of dealing with cultural differences.
But you also have to consider how much effort you want to account for interviewing and training. And do you want to be responsible for employee benefits and payroll processing?
All that time saving you thought you were getting could dwindle away unless you have an outsourcing partner that can take care of all that work for you.
Not only does it save you time and effort, but you receive one simple monthly invoice based on the chosen service levels.
Step 4: Reap Benefits And Cost Efficiency
Within just a few weeks, you could have a fully trained VA working alongside your employees and freeing up a significant amount of non-dollar productive but important tasks.
While you might be adding a small amount to your business expenses, that investment will pay off massively in the competitive advantage that your team will immediately enjoy. All of our clients have seen these kinds of drastic changes for an entire project.
And they’ve always wished they had explored finding an outsourcing partner sooner.
Contact Us Today
Whether you don’t have the office space to hire new employees in-house, or you separately need to free up time for your employees to become less weighed down with repetitive admin tasks, your first action should be having a conversation with one of our team members.
At OutsourceWorkers, we have built a reputation for successful partnerships with many different businesses.
We can help guide you through the entire process, and you could be up and running with a new VA within a matter of days.
Call us today for a free consultation and see for yourself how much time you could free up.