In the past, companies that decided to venture down the outsourcing route have typically handed complete control of specific business functions to carefully selected third parties. These contracts have generally included detailed service level agreements that have justified large investment from the customer, and often required long periods of commitment.
Therefore, this kind of service has typically appealed to large multi-national organisations that can afford to spend significant amounts in capital expenditure. However, despite measured success, this blanket style outsourced offering has not always been viewed positively, and outsourced services have been restricted by the reluctance of senior business executives to hand over control of core processes. This stems from apprehension to allow a third party to access highly sensitive company data.
However, due to a changing economy, there have been many changes in the business and IT sectors, and outsourcing has been no exception. In order to meet the requirements of shrinking budgets, outsourcing has become a more affordable, less holistic offering, and for these reasons, outsourced services are becoming increasingly popular in the SME market.
Outsourced services certainly have their benefits with customers often being attracted by the promised teams of specialised professionals which are committed to provide a round the clock service. These teams include project managers, migration experts and support teams that are dedicated to overseeing that the outsourced functions operate smoothly, efficiently and on-time. In smaller enterprises, these dedicated resources are often simply not available in-house as the time of all IT staff is divided between managing a variety of functions such as supply chain communication and data centre management.
While outsourced services can offer more expertise and greater levels of efficiency, direct costs savings can also been seen from reduced in-house staffing and other personnel charges. A good outsourced offering should also reduce the amount of errors or mistakes which often incur penalty charges by customers, meaning extra cost savings. Whilst reduced expenses are important, particularly in today's market, transparency of cost is another key benefit of an outsourced service. The "flat priced" structure offered by good service provider's appeals to all businesses but particularly small businesses where standardised rates can be easily factored into financial plans.
The transparent pricing structure that outsourced services can offer appeals to businesses because of its predictability. There are no nasty costly surprises lurking around the corner, and both the customer and service provider are agreed in the level of service/expectations set by the contract. However, this is nothing new for outsourcing, and the real change over the past eighteen months has been seen in the way in which outsourced services are offered.
Whereas in the past, companies would outsource control of the entire business function to a third party, now a good outsourced service provider will have a more granular offering which begins with established building blocks that will serve as a foundation for the offering .They will then have the ability to build additional layers of services and contractual obligations on top of that to ensure the customers' needs are fully met as basic requirements change. Again, using supply chain outsourcing as an example, the "foundation" should be a highly scalable hosted infrastructure with proven availability metrics. The platform should manage electronic data interchange including any data delivery and translation requirements. As and when the business grows and finances become available, the customer may also then decide to hand control of delivery tracking and invoicing to the outsourced provider.
This way, the outsourced provider can fit their offering around the customers needs and both parties avoid additional complex contract and payment negotiations. Again, this streamlines the business process, improving efficiency and making life easier for both the customer and in turn, its own clients.
Small and medium businesses can really take advantage of the changing outsourcing market. Outsourcing is a service that has previously been slightly out of reach for the smaller enterprise in the past, but can now offer real business and cost benefits at a time when finances and service levels are more important then ever. Dedicated resources offered as tailored solutions can benefit organisations of all sizes both in the short term, but also as businesses grow and change. With customer experience and value for money becoming increasingly essential to each businesses survival, the outsourced services market certainly has its finger on the pulse and therefore it is no surprise that market is growing at a steady rate.
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