Business Process Outsourcing

Many organisations are now into their second or third generation of outsourcing. Accounts, IT, HR, property management and even marketing functions are now commonly externalised.

Cost savings, which historically have been the main driver of outsourcing, remain an important factor. However, there is an increasing realisation that outsourcing brings other real advantages, including:

• Gaining access to world-class skills, experience and resources
• Removing non-core business and freeing-up management to focus on developing core business activities
• Improving financial control and ensuring greater certainty of future spending
• Gaining access to new markets [and product re-engineering]

That said, outsourcing may not always be the most suitable strategic option for a business and potential disadvantages include:

• loss of control over a crucial business service
• lack of flexibility in the services received
• damage to staff morale, and culture clashes between the service provider and customer

To making outsourcing work effectively, planning is crucial. This means:

• Selecting the best outsourcing partner in the most relevant location and
• Making sure that all stakeholders (including senior management, technical and front line staff and customers) know what is going on and how it will affect them.

It also goes without saying that the outsourcing agreements themselves must be properly structured and thought-through and should always include:

• Details of how service relationships will be managed and benchmark performance
• A mechanism for escalating and resolving problems
• Exit strategies and a way of managing with the consequences of termination.

We have considerable experience in all aspects of business process outsourcing especially anticipating potential problems and advising on how best to address them. We are also regularly help clients with other key outsourcing issues such as asset ownership and employment/TUPE.

Recent outsourcing assignments include:

• Information services helpdesks for a leading auditing organisation
• Indexing, storage and retrieval of files and documents for a major insurance company
• HR training and recruitment function of a leading UK information business
• Training and education services to one of the top four UK telecoms companies