Teri Bradshaw | Senior Analyst of Customer Solutions, Synter Resource Group
Most companies are feeling the impact of the COVID-19 global pandemic crisis. CFOs are looking to cut expenses to stay afloat, but we all know this can sometimes be at odds with what needs to be accomplished operationally—especially once things return to normal. Nobody wants to trim staff, and this is exceptionally true during a pandemic; however, it is the pink elephant in the room and will likely need to be considered. What if you could utilize your strongest people in your organization to focus on your core competencies, and outsource mundane tasks to a provider that could do the work for a 20%-40% savings on your current costs?
In the article, How to Outsource Work During the Coronavirus Pandemic, Rachel Weingarten alludes to the notion that some companies are hesitant to outsource for various reasons; however, she goes on to quote Karen Swim, founder of Solo PR Pro, an organization that provides tools, education and advocacy for the PR industry, “Outsourcing is a rock star move … when you outsource, you are bringing in a resource that specializes in that task, hiring experts who can get it done faster, better and cheaper.”1 So why don’t more CFOs outsource?
Common Fears of Outsourcing
One of the fears of outsourcing is that it would just take too long to bring an outsourcer up to speed on your industry and all its nuances. That is why it is so very important for companies to choose an outsourcer who specializes in their particular industry. For instance, a company wouldn’t want to hire a provider that specializes in medical outsourcing if they are in the transportation industry and vice versa—the learning curve would just be too steep. In addition, companies should look for an outsourcer who has powerful technology to leverage automation for more consistent processes and results. Should the outsourcer meet these requirements, there is some assurance they can hit the ground running and provide a quick and painless transition.
Companies may also harbor reservations on outsourcing because they are worried about how it would impact their customer experience. If a company is extremely customer-centric, with white-glove service, they will want to look for a provider who can provide that same level of service, but at an overall savings. Again, finding an outsourcer that is dedicated to your industry is key. Furthermore, if offshore options bring anxiety due to language barriers and timing to get issues resolved, look for those with onshore or nearshore operations, who can provide services in your customers’ languages and during their business hours.
There are also, at times, concerns about giving over the managerial reigns to people who are not company employees. While at first this can be scary, once an outsourcer is hired who has done the same job successfully for similar companies in the same industry—not having to hire, train, and manage employees will be a huge relief in the end and will allow the leadership team to focus on more important endeavors—like helping the business grow! Overcoming these fears will make a company ripe for that “rock star” move of outsourcing.
What Processes Should Be Outsourced?
When considering what to outsource, companies should think about those tasks that are repetitive in nature or are what can be considered “non-revenue generating.”
One might be the order-to-cash (OTC) process. In an article published by ISG, Order to Cash Outsourcing—5 Reasons Why It’s a Trend to Watch, it notes that “OTC outsourcing has typically been on CFOs’ lists of ‘potential outsourcing opportunities,’ but it has not risen to the top of the list until recently.”2
Companies should look for a source that can provide an “end-to-end” experience. This means they can take on every facet of this process, from order management, credit management, invoicing, cash application, dispute resolutions and collections. ISG notes, “These end-to-end capabilities drive higher efficiency in transaction processing as well as resolution of order entry mistakes, pricing disputes, billing errors and credit or collection issues.”2 When an outsourcer has these capabilities, their customers can choose to outsource the entire process or pick and choose what makes the most sense for their business and budget. As for what portion of their portfolio should be outsourced, companies may not want an outsourcer taking over their high dollar/high exposure accounts, but sending over smaller customers or miscellaneous portfolios could really loosen up their internal staff to focus on those high-demand customers and provide them with a better customer experience.
Another area that could benefit from outsourcing could be document retrieval and management. For 3PLs, having all of the documents necessary to bill their customers in a timely fashion is crucial. Why have internal staff chase documents when this task could be outsourced with faster and more consistent results?
And lastly, don’t overlook sales operations functions. More and more companies are looking to outsource their lead qualification processes as it is a tedious and time-consuming process. The cost to convert a lead to a customer can sometimes be quite high, but an outsourcer decreases these costs because companies won’t have their highly paid account executives following up on fruitless leads. The outsourcer qualifies the leads based upon specific criteria, and then passes only those who meet the criteria on to their executives for follow up and conversion.
As we all try to navigate the unchartered waters of COVID-19, not only the strong companies will survive, but the smart ones as well. For those looking to be creative, yet practical, outsourcing could be the smart choice that will not only help your company stay above water, but possibly a little less unscathed as well.
Teri Bradshaw is a Senior Analyst of Customer Solutions at Synter Resource Group, a Charleston, South Carolina-based business solutions provider. Synter is a leader in providing business process outsourcing solutions that improve your company’s functionality, while reducing operating costs.
1 Weingarten, Rachel. “How to Outsource Work During the Coronavirus Pandemic.” Ladders. May 1, 2020. https://www.theladders.com/career-advice/how-to-outsource-work-during-the-coronavirus-pandemic (accessed May 20, 2020).
2 ISG. “Order to Cash Outsourcing – 5 Reasons Why It’s a Trend to Watch.” ISG. 2020. https://isg-one.com/events-landing/2019/bay-area-digital-executive-dinner-series/order-to-cash-outsourcing-5-reasons-why-it-s-a-trend-to-watch-today (accessed May 20, 2020).
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