5 False Assumptions every Executive should Know about Outsourcing - TELUS International Europe

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  • 5 False Assumptions every Executive should Know about Outsourcing

    Companies from among all industries and across the size spectrum have proven many times with their experience the value of business process outsourcing (BPO).

    Still, there are debates regarding the perceived benefits and concerns surrounding outsourcing. Not all of the commonly discussed concerns or perceived disadvantages, however, are founded on direct experience and truth.

    In this article will debunk the most common misconceptions associated with outsourcing and disprove unqualified fears which have been stopping C-level executives to take the decision of outsourcing their business.

    False Assumptions

    1. Outsourcing Leads to Loss of Control

    Some businesses are under the impression that outsourcing means giving up control of their own business because the services (for example) that have been managed and delivered in-house are in the hands of an external party. The major concern here is that these services will be out of reach in terms of control and change management.

    However, this is not the case. Good outsourcing arrangements are based on true partnerships, aligned around common business objectives and clear guiding principles that support the long-term goals of your business. Maintaining open communication and having aligned priorities with your vendor won’t allow you to lose either reach or control of your business.

    2. Outsourcing is Too Expensive

    An in-house solution generally requires a large up-front investment in technology and personnel. Furthermore, as technology has to be regularly updated the investment continues overtime. In addition, businesses usually find that technology must be optimized to work on a global scale which requires additional budget. On the contrary BPOs have those assets upfront as they are obliged to commit to certain standards regarding technology and personnel qualifications, in order to fulfill the requirements for certificates guarantying the quality of their services.

    Let’s illustrate with an example why it may seem that outsourcing might be an expensive option. Let’s take as an example a company that has outsourced its contact center and want to increase effectiveness. The new goal for the vendor would be to answer 99% of the calls within a minute compared to 95%. For sure, to achieve that goal having more customer service agents on hand would be necessary, especially on peak periods. Hence, the increase in full time employees (for example) is ultimately bound to increase in budget.

    3. Outsourcers Don’t Understand my Business

    Again this is not the case. On the contrary, improved quality can be achieved by contacting with vendors with more expertise and more specialized processes in your area of operation. At least a good partnership will seamlessly transfer the operations of a service without decreasing its quality of service because vendors are bound to certain levels of service and quality.

    Outsourcing gives an organization exposure to vendor specialized systems which allow not only for efficiency of business processes to be achieved but innovation too. Outsourced solutions employ dedicated experts to manage the outsourced process. These experts offer years of experience that many companies do not have access to or cannot afford on an ongoing basis.

    4. We Need an Ironclad Contract

    Many executives take the wrong approach of writing overly complex contracts with goal of protecting their business from the effect of any possible negative circumstance that may appear. However, as outsourcing is not a one-time transactions but an exchange that evolves as competitive conditions and technology change, trying to protect your business with ironclad contact is a waste of time.

    Accept that it is impossible to take all possibilities into account and instead focus on ensuring that all parties understand their roles and responsibilities, and then put in place a process for negotiating changes.

    You’ll be taking the risk to soar the relationship with your vendor even before the project has been started if you involve into prolonged and contentious contract negotiation process. What is even more problematic with overly complex contacts is that it makes the relationship between the vendor and the client even more inflexible. For example, signing a new contract may be needed every time when any changes such as new industry regulations or a change in business strategy appear.

    5. It’s Not Secure

    Concerns about security safeguards were major source of mistrust in the early stages of development of the outsourcing market. Now, however, as the industry has matured, these worries have largely disappeared. The reason is that most modern outsourcing vendors have very sophisticated security programs and management in place which do not allow for either confidentiality breach or leak of information to appear.

    For outsourcing providers, security is a top priority because any data breach can cause them their own business. Security measure such as physical data center safeguards and data transfer infrastructure with controls that equal or exceed the protection of behind-the-firewall defenses have been employed by many of the outsourcing providers.

    Key Takeaways

    Regardless of your decision be informed that outsourcing is more than a vehicle for workload efficiency or a cost saving strategy. Gone are the days when the major reason for outsourcing was cost reduction. These days outsourcing has the ability to expand the horizons of the organization to new ideas, capabilities and expertise. What is more important, it provides a platform for innovation that can transform how things are done.

    Last but not least, remember that in outsourcing every assumption made should be based on logic and information from research done regarding the subject, otherwise you risk false assumptions to dictate the future of your business.

Did you know?

TELUS International Europe Romania is among the "Most Loved Employers" in the BPO sector according to the Inspire Group and Mercury Research.

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