Outsourcing: How to Boost your Business Resilience in 1 Step
In times of crisis, highly resilient businesses are much more likely to survive. One way you can improve your business resilience is by outsourcing.
In this article, we will explore:
- What business resilience is
- Why it matters
- How outsourcing can boost business resilience
- The pros and cons of outsourcing
- Top 12 outsourcing companies
- How to choose the best outsourcing partner
- How COVID-19 has affected outsourcing
Defining business resilience
Business resilience is a term used throughout the business world to describe crisis management and business continuity. It encompasses all types of risk that an organisation may encounter, from cyber attacks to natural disaster. As well as taking into consideration the consequences of a major incident, business resilience takes into account the ability of a business to recover and adapt to the new circumstances and environment caused by the incident.
During a global pandemic, no wonder business resilience is a trending topic. This is something McKinsey have written a lot about.
Why does business resilience matter
Business resilience is vital for any business to survive. Although it is hard to consider all eventualities, businesses need to have a strategy to spring back from an incident, adapt and recover.
As the current global pandemic has demonstrated, anything can happen, even the most unexpected. For example, no business has been left untouched by lockdowns. There has been a rise in flexible working practices in the past few years. This has meant that many businesses were in a better position to adapt to the new restrictions than they might have been a few years previously.
Still, any weaknesses in flexible home-working plans have been made apparent. Even companies who already had employees working outside the office have had to make changes. Cloud usage has shot up as businesses have had to find new ways of communicating internally.
Remodelling threat models based on homeworking has been key to successfully managing the effects of the pandemic.
Business resilience and the ability to be flexible and adapt have been instrumental to business survival during this pandemic.
Business resilience and COVID-19
Of course, COVID-19 has impacted all industries. However, the pandemic has had very different consequences for different industries.
According to a Connected Commerce Council and Google report that looked at SMEs in America, the most badly impacted industries have by far been the travel industry, entertainment industries and the catering and food services industries. These findings have been reflective of more global trends.
However, other companies have done remarkably well due to COVID-19. One example is online retail. Amazon’s sales skyrocketed during the initial quarantine as a consequence of consumers not being able to go into physical shops. On March 12, Amazon’s stock price closed at $1,676.61. By the end of June, it was nearly $1,000 higher.
Another obvious example of companies that have done well is workspace solutions providers. Companies have increasingly had to move towards more remotes and flexible working models. According to Gartner, nearly 25% of CFOs said they would move at least a fifth of their on-site employees to permanent remote positions. As a consequence of increased remote working, having the right security and collaborative technology have become a priority for business leaders.
Outsourcing, a solution for business resilience?
Outsourcing is the hiring of an external party to carry out planned activities such as manufacturing goods or providing services. It often involves a business agreement describing all the responsibilities of both parties.
Sourcing something out is about delegating business processes and other activities to a different organisation. This is done, for instance, to focus on core business activities or to reduce costs.
An important question for many businesses is whether outsourcing will save them money, or whether it’s financially more interesting to do or produce something themselves.
Because many external parties are able to offer services or manufacture products at lower prices, outsourcing can apply to a wide range of activities, including customer service, manufacturing, back office, IT, and HRM.
This is why outsourcing can be a great way to boost your business resilience. Instead of having your internal staff do everything without necessarily having the expertise, you can outsource specific tasks or processes which experts will be able to understand and manage much better.
On the long-term, this can ensure that if any incidents happen, you are not left stranded without knowing what to do. You will have experts by your side who understand can adapt faster and thus potentially save your whole business.
The pros and cons of outsourcing
Outsourcing has generated a lot of controversy. Proponents claim that outsourcing is an opportunity for organisations to assign resources in ways that make them the most effective. Opponents argue that outsourcing has contributed to the loss of domestic jobs in certain countries.
Outsourcing business activities is an efficient and effective process that lets both parties use their resources in the most effective way. It’s also a sustainable process. It helps organisations to achieve their objectives by, on the one hand, reducing costs, and on the other, increasing productivity. At a macro level, the advantage of outsourcing is that it benefits the local economy of the host country where the production takes place on behalf of another company.
Many businesses use outsourcing as a strategy to gain a strong competitive edge. In this case, the parties who are outsourced to are considered strategic partners instead of mere contract partners. Companies that don’t necessarily use outsourcing as a strategy, but outsource certain activities also enjoy a number of advantages:
- Reducing costs and increasing control
- Maintaining and improving focus on key activities
- Using resources more efficiently
- Scouting talents
- Reducing and sharing risks
- Access to new markets
- Embracing improved productivity
Often weighed with the advantages before any decision on outsourcing is undertaken, the following represents some of the possible disadvantages:
- Possible loss of expertise and control over a company’s business processes
- Problems related to quality and turnaround time
- Sluggish response times coupled with slow issue resolutions
- Shortcomings in performance vis-à-vis expectations
- Lower than expected realization of benefits and results
- Issues pertaining to lingual accent variation
- Dependence on the supplier
- Loss of control over costs
Top 11 Outsourcing Companies In The World
It can be hard to even know where to start when it comes to outsourcing. To help you, here is a list of the top 11 outsourcing companies in the world.
Accenture is an international professional services company. Their purpose is to deliver on the promise of technology and human ingenuity. Worldwide, they have 505k employees and have partnered with the likes of Google, Apple and Microsoft.
Automatic Data Processing, Inc., also known as ADP, are a global provider of cloud-based human capital management (HCM) solutions. These solutions bring together HR, payroll, talent, time, tax and benefits administration.
They are also leaders in business outsourcing services, analytics and compliance expertise.
Capgemini is a global leader in technology services, consulting, and digital transformation. They support the entire breadth of clients’ opportunities in the growing world of digital, cloud, and platforms.
They mainly focus on app development and digital product development along with a range of other technology solutions.
Cognizant offers digital solutions involving IT, business operations and consulting.
Web design and software development services represent only a small portion of their business model. More than just a software development company, they also deliver more advanced services like digital engineering and AI.
HCL Technologies is a global tech company that helps businesses reimagine themselves and adapt to the digital age. HCL Technologies specialises in consulting and IT services. They work within multiple industries such as civil amenities, healthcare, and life sciences.
IBM is an American-based IT company that operates in over 170 countries worldwide. They offer multiple high-level BPO services and IT outsourcing services across many different industries.
Recently, IBM have set a key focus on fields like machine learning, IoT and big data analytics.
Infosys is a global leader in digital services and consulting. With nearly 40 years of experience working with global enterprises, they help their clients navigate their digital journey. Infosys provides business consulting, information technology, and other BPO services.
Sciencesoft, founded in 1989, is an IT consulting and software development services provider. With over 30 years in IT, they have developed expertise in CRM, ERP, Ecommerce, Data Analytics, Information Security, DMS, and other areas. They have also mastered such innovative fields as AI and Machine Learning, Big Data, IoT, Computer Vision, and Augmented and Virtual Reality.
Tata Consultancy Services
Tata Consultancy Services (TCS) is the biggest consulting and IT service corporation in India. TCS has operations in 46 countries worldwide.
TrinityWired is one of the top IT outsourcing companies in the world. It provides a range of IT solutions and has over 15 years of experience in web and mobile app development. They work within all kinds of industries such as banking, healthcare, financial, marketing, retail, advertising, education, telecommunications, oil and gas, and logistics.
Wipro is an Indian-based global IT, consulting and business process outsourcing services company.
They use the power of cognitive computing, robotics, hyper-automation, cloud, analytics and emerging technologies to support their clients during their integration into the digital world. They have over 180,000 employees working across six continents.
Wipro work with clients within all kinds of industries, from oil and insurance to marketing and banking.
How to choose the best outsourcing partner
There are plenty of options to choose from when it comes to outsourcing, which makes it extremely hard to choose the right outsourcing partner for your business. However, there are a few steps you can follow to ensure you make the right decision.
1. Set a list of requirements for your ideal partner
You should start by listing all the qualities you are looking for in an outsourcing partner. This selection or requirements should be specific to your business needs.
Examples of criteria could be:
- Industry expertise: Does the outsourcing company have expertise in any specific industries?
- Services provided: What kind of outsourcing services do they provide?
- Previous clients: Have they had any notable clients?
- Cost: How much is the outsourcing company asking for?
- Company size: How many employees are there within the outsourcing company?
2. Select the best contenders
Taking into consideration the requirements used in the previous step, shortlist the outsourcing companies to the top 3-5 which best match your requirements. This will give you enough leeway to narrow your selection down further whilst still getting rid of the bulk of contenders.
3. Organise a test project
Give your shortlisted outsourcing businesses a test project to complete. This will allow you to get a clearer idea of their work and performance.
Your test project should be similar to a project you would give if they were a partner. This will ensure you have a clear notion of how they would perform if they did come to work with you.
4. Evaluate their performance
Once your shortlisted companies have completed your test project, you should organise them from top to worst performer. To do this, you should set clear metrics and benchmarks.
Some of these metrics and benchmarks could be:
- Adaptability to updates and changes
- Ease of communication between parties
- Quality of the work
- Time taken to complete the project
When setting these metrics and benchmarks, you should not forget your list of key requirements that you set in the first step. Remember what is most important to your business.
5. Regularly evaluate their work and productivity
It often happens that an outsourcing company will put its top employees on the test project. However, that does not mean that they will continue to work up to that standard once you have signed the contract.
This is why it is vital to regularly evaluate their performance metrics. You could do this every quarter to make sure standards don’t drop.
Outsourcing during the COVID-19 pandemic
Outsourcing is great as long as you have solid partners.
But COVID-19 has quite obviously had a massive impact on the business world, and outsourcing was not spared.
The whole principle is that some business processes are delegated to another company, either in the same country or abroad. COVID-19 has led to many travel restrictions around the globe.
Meetings and face-to-face contact between business partners has been severely curtailed. With such interactions being so crucial to business before the pandemic, businesses have had to adapt very quickly to the situation and find new ways of communicating to maintain efficient business operations.
COVID-19 has also led to shortages in labour, products and raw materials, meaning companies have sometimes had to look elsewhere for new partners and collaborations.
Yet these issues can be overcome!
Explore CONNECTS: find outsourcing solutions post COVID-19
CONNECTS is a great way for entrepreneurs to find new partners and ways to outsource some of their business processes.
Indeed, CONNECTS is a business matchmaking platform which allows members to post and react to opportunities. Whether looking for new partnerships or to discover another company of interest, it is easy for a member to start up a business conversation with other members.
Working with Chambers of Commerce, the platform provides access to trustworthy leads, suppliers, partnerships, skills, and business communities. Every opportunity posted on CONNECTS is from an approved and validated Chamber member.
CONNECTS will allow you to find the outsourcing partner you are looking for.
Enjoy 1 month free trial, check out our pricing page! This offer includes:
- The opportunity to connect with all our members
- Validation by a moderator
- Access to the companies and member search tool
- View and create business opportunities
- Online training on how to use the platform
Want to learn more about CONNECTS? Find us on Google maps! For more information, don’t hesitate to contact us.