Outsourcing has helped improve organisation’s focus and generate growth. Among the many benefits of outsourcing is that it adds value to your business, helping you provide more services to your clients. Most economists would agree that it is a good business strategy. But how does it really affect in sustaining the value chain and extending the benefits to the clients?
According to Martha Craumer of Harvard Business Review1, outsourcing isn’t just a way to unload noncore costs. The real play with outsourcing is to use it as a tool to drive strategic value, transform businesses, and even fundamentally change industry dynamics. She added, “as outsourcing continues to move beyond back-room functions into more strategic areas of the business, the standard bidding process is losing favor; more and more companies are realizing that their best partner is the one that offers them the greatest value, not necessarily the lowest cost.”
Outsourcing encompasses the relationship of the service provider with their clients as they can see them taking control of managing their transactions and perceive their capabilities in delivering their service. In other words, it is a collaborative process in order to achieve long-term value and reduce settlement risk.
It is also important that organisations report customer satisfaction. The recent KPMG study2 of more than 490 contracts worth £10 billion has suggested the desire to improve customer satisfaction is a major factor behind many organisation’s decisions to outsource key technology-based services. The study revealed a 20-point increase in the ‘search for quality improvement’ since the issue was first raised in 2009, as 48% of respondents admit to basing decisions to outsource on a desire to improve service levels.
Likewise, outsourcing service providers must aim to observe strategic business objectives when delivering their output. Strategic objectives, such as outsourcing initiatives must come from the top echelons of a company. Senior management must articulate the goals and objectives of the outsourcing initiative and communicate how the process will benefit the organisation. When the quality of the output meets or even exceeds the organisational goals, that’s when real business value is gained. Therefore, understanding the company goals and objectives is a vital part of a successful outsourcing program.3
Outsourcing should not only benefit the individual company and the outsourcing company, but also the clients they are servicing. Everyone included in the value chain must be involved in the process in order to ensure satisfaction.
The Outsourced Accountant supports Australian and New Zealand accounting firms by helping them understand and implement outsourcing solutions to help them become more proactive and truly add value to their clients. If you want to know more about outsourcing, call us at 1300 896 522, and download our e-book.