Businesses are always looking for new ways to deliver value to their customers, increase revenues, expand their reach, and ultimately grow their bottom line. Business Process Outsourcing is one strategy that has the potential to help them achieve all of the above objectives.
Deloitte’s 2016 Global Outsourcing Survey shows that companies around the world aren’t simply transferring some of their functions to external parties to reduce expenses, but doing so with a more strategic lens to help them focus their limited resources on core functions as well as getting back to basics, like staying close to their customers and delivering on critical value propositions. This enhanced focus on core functions and activities is enabling companies to realize substantial productivity gains in the areas of staff performance, use of equipment, tools and other company resources, and more optimal use of capital. Outsourcing isn’t just helping companies become more efficient, it’s encouraging leaner and more technologically savvy operations. Another exciting advantage for companies that outsource is the speedy acquisition of the specialized knowledge and expertise needed in strategic areas, which has helped drive significant improvements in performance that in turn boosts profitability.
While there are several functions that can be outsourced, the three most popular ones are information technology (IT), human resources (HR), and finance. There are several factors that Caribbean businesses should consider when deciding on whether they should follow the global trend of outsourcing these top three positions.
Information Technology
When it comes to IT, businesses may find that outsourcing to a reputable company enables them to access the latest and best technology solutions for their operations, delivered and maintained by certified and experienced IT specialists. Because of the extensive infrastructure required to outfit IT departments and the substantial staff costs for qualified talent, it is usually more cost effective to outsource IT. Downsides may include reduced control, exposure of sensitive company information, and other security concerns, which should be considered.
Human Resources
Most businesses consider human resources as the most critical function however, it can also be the most challenging to acquire, develop, manage, and retain. Additionally, human resources is often the least predictable in terms of consistency of output, value-add, and tenure. Caribbean businesses may find that outsourcing HR may be quite timely today, because managing this function is getting increasingly complex because of onerous statutory obligations, coupled with the challenge of millennial employees, who have earned the reputation of being less engaged at work, less committed to their companies, and are often searching for the next, new job opportunity. Some of the other benefits of outsourcing some human resource management functions include reduced time to fill positions, higher caliber talent, improved performance management, reduced tax and legal liabilities, lower costs, among others.
Finance and Accounting
Perhaps the business area in which Caribbean businesses struggle most, is finance. Limited capacity in managing finances and limited access to financing in particular, have resulted in slower rates of company growth and increased vulnerability for businesses across the region. There are many businesses that have not dedicated any resources to the management of finance and accounting which stymie their potential. A business cannot realize its true potential if it isn’t aware of its true financial position, and doesn’t set goals for, measure and benchmark its return on assets, liquidity, profitability, growth, management efficiency, and more. One of the best strategic decisions for 2017 may well be strengthening the financial management of the company through outsourcing some key elements. Some benefits of using a competent accounting company is the ability to adhere to international financial standards, automate accounting processes, maintain up to date accounts, benchmark against industry standards, enhanced planning, improved cost control, and ultimately better decision-making.
Business Process Outsourcing is not just a trend that businesses need to watch. It is increasingly becoming a best practice that enhances competitiveness to achieve long-term goals and objectives.
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