{"id":1191,"date":"2023-05-26T21:08:26","date_gmt":"2023-05-26T21:08:26","guid":{"rendered":"https:\/\/www.confiebpo.com\/knowledge-center\/?p=1191"},"modified":"2023-05-26T21:33:06","modified_gmt":"2023-05-26T21:33:06","slug":"effective-outsourcing-strategies","status":"publish","type":"post","link":"https:\/\/www.confiebpo.com\/knowledge-center\/bpo-basics\/effective-outsourcing-strategies\/","title":{"rendered":"6 Effective Outsourcing Strategies for a Competitive Advantage"},"content":{"rendered":"\n
Outsourcing non-core activities frees up resources to focus on core competencies and helps differentiate your business from competitors.<\/p>\n\n\n\n
Creating an effective outsourcing strategy<\/a> requires your firm to determine its core competencies, build an analytical framework to identify which functions to outsource, and then iterate as needed to achieve success.<\/p>\n\n\n\n Read on for the 6 key components that underpin successful outsourcing strategies.<\/p>\n\n\n\n Start by identifying your company\u2019s core competencies, which are the unique strengths that set your business apart from competitors.<\/p>\n\n\n\n To identify your firm\u2019s key capabilities, you can use the following tools:<\/p>\n\n\n\n With this framework in place, your company can determine when or what to outsource.<\/p>\n\n\n\n Another methodology that can help you triangulate your firm\u2019s capabilities and determine where outsourcing sits in management\u2019s strategic priorities uses a classic business framework known as Porter\u2019s Five Forces. The exercise involves identifying the parties and context of the following five aspects of your industry and firm:<\/p>\n\n\n\n These five forces can help your firm determine when to outsource and when to take another path. For example, if a firm faces high competitive rivalry, low bargaining power, and low threat of substitute products, outsourcing may be a viable option to reduce costs and improve efficiency.<\/p>\n\n\n\n The components of a company are many. A small company may be able to put several hats on one employee or owner, but as the company grows, each part becomes more complex and more important. Can you ask one employee to take on the entire back office processes \u2013 from billing to accounts payable to human resources? It gets more difficult as the company expands.<\/p>\n\n\n\n Another important part is the overhead and expenses that come with dedicated employees performing one aspect of the company. Do you have dedicated employees to answer the call of a potential customer at all times? Customer retention is much less expensive than customer acquisition, but one call that goes to voice mail can mean the end of a relationship.<\/p>\n\n\n\n With today\u2019s leaps and bounds in the technology space<\/a>, if you cannot keep up with the latest in software, you immediately become disadvantaged. But constantly upgrading and training is very expensive. Would it be justifiable to turn that over to a BPO partner so you stay a step ahead of your competition?<\/p>\n\n\n\n The typical business school answer is: It depends. Once you have identified your firm\u2019s core capabilities and strategic threats, you should have a strong idea of which functions to consider outsourcing so you can focus on the above.<\/p>\n\n\n\n One common function that many firms outsource is the call center business unit. Call centers require significant capital expenditures to bring them up to speed, and they also have high operating costs.<\/p>\n\n\n\n A dedicated nearshore call center<\/a> BPO partner can take this off your management team\u2019s plate so they can focus on strategic priorities.<\/p>\n\n\n\n Nearshoring, which involves outsourcing to a nearby country, can be a good solution for companies that want to outsource while maintaining more control. For example, a software development company based in the United States may choose to nearshore to a city in Mexico, such as Tijuana, to take advantage of similar time zones and easily communicate with and oversee the development team.<\/p>\n\n\n\n Another advantage of a nearshore call center<\/a> is agent familiarity and expertise with your customers\u2019 language and culture.<\/p>\n\n\n\n Establish clear communication channels with your outsourcing partner to ensure expectations are met, and issues are resolved promptly. This includes regular progress updates, reporting, and performance metrics.<\/p>\n\n\n\n Holding your BPO partner accountable can go a long way toward ensuring your business achieves its objectives, including both inbound and outbound goals<\/a>. Outsourcing as a business strategy relies on communication and strategic alignment to achieve its best possible results.<\/p>\n\n\n\n Establish performance metrics and service-level agreements (SLAs) to ensure outsourcing partners deliver on their commitments. These metrics should align with your business objectives and should be reviewed periodically.<\/p>\n\n\n\n Here are some of the more common call center<\/a> metrics to keep an eye on:<\/p>\n\n\n\n With non-core functions successfully outsourced to a strategic partner, your firm can then reinvest in its primary capabilities. Based on the framework analysis conducted in steps 1 and 2, you should have a strong idea which projects will provide outsized returns on investment and lead to a positive net present value (NPV).<\/p>\n\n\n\n Naturally, this exercise should be conducted periodically to determine when it makes sense to shift additional responsibilities to your BPO call center partner or to take back some of those capabilities to integrate into your team.<\/p>\n\n\n\n Outsourcing can support a corporation by increasing efficiency, reducing costs, and accessing specialized skills. Key factors to consider when outsourcing are selecting the right partner, defining roles and responsibilities, and ensuring alignment with the company’s goals and values.<\/p>\n\n\n\n Outsourcing can solve business problems such as staffing shortages, technology gaps, and regulatory compliance requirements. To define a successful outsourcing strategy, companies should assess their needs, resources, and potential risks, and develop a tailored plan that considers budget, timeline, and performance metrics.<\/p>\n\n\n\n Confie BPO can help your business determine if it should outsource to improve efficiency and streamline operations with a successful outsourcing strategy. To learn more, contact Confie BPO online<\/a>, via telephone at 800-684-2276<\/a>, or by email at contact@confiebpo.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Outsourcing non-core activities frees up resources to focus on core competencies and helps differentiate your business from competitors. Creating an effective outsourcing strategy requires your firm to determine its core competencies, build an analytical framework to identify which functions to outsource, and then iterate as needed to achieve success. Read on for the 6 key […]<\/p>\n","protected":false},"author":8,"featured_media":1193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5],"tags":[],"class_list":["post-1191","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bpo-basics"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/1191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=1191"}],"version-history":[{"count":3,"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/1191\/revisions"}],"predecessor-version":[{"id":1196,"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/1191\/revisions\/1196"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/media\/1193"}],"wp:attachment":[{"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=1191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=1191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.confiebpo.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=1191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}1. Identify Core Competencies<\/h2>\n\n\n\n
2. Conduct a \u201cFive Forces\u201d Exercise for Your Company and Industry<\/h2>\n\n\n\n
3. Determine Which Business Units Make Sense to Outsource<\/h2>\n\n\n\n
When should a company outsource?<\/h3>\n\n\n\n
When should a company nearshore?<\/h3>\n\n\n\n
<\/figure><\/div>\n\n\n\n
4. Establish a Strong Initial Relationship with Your Business Process Outsourcing Partner<\/h2>\n\n\n\n
5. Identify Performance Metrics to Measure Outsourcing Success<\/h2>\n\n\n\n
6. Reinvest in Your Firm\u2019s Core Competencies and Expand Its Capabilities<\/h2>\n\n\n\n
Unlock Your Company\u2019s Full Potential with an Effective Outsourcing Business Strategy<\/h2>\n\n\n\n