Single Window Sourcing
Reduce Spot Buys
Multiple Vendors Mgmnt
Total Spend Savings
Outsourcing is not just cut costs!
When companies are unable to make and withstand the desired bottom-line year after year, the pressure comes from top to down to look for all avenues of value improvement. Although the companies originally began outsourcing as a cost cutting technique, later they are forced to debate between cost cutting and value creation because sustainability is the key driver.
This healthy discussions among senior management teams of every company unfolded a message that ‘cost cutting was tactical and value creation was strategy’.
Outsourcing is not something a new phenomenon in the industry that one should do many researches before discussing with his / her management to consider.
It has been there for many years and gained more visibility when company security-guard services are outsourced to third party followed by other trivial functions. Momentum was seriously picked up to outsource even vital functions when companies realised they are really growing and need right expertise to handle bigger volumes.
When in-house capability has got its own limitation, companies faced a challenge even to invest and hire experts from outside. It led to serious shift of mind-set from hiring experts, they decided to hire expertise.
This paradigm shift of capability sourcing was considered more innovative both in terms of cost and quality deliverables.
We have found that 85% of the customers whom we have interacted that cost is less prioritised in front of quality deliverables, again because of the sustainability reasons. Sustainable quality deliverables are always derived only through a set of disciplined processes that cannot be simply broken once established. Companies look at them as strategic rather than cost cutting which is more of tactical and temporary.
Recuce Admin Cost
Low Existing Users' Efforts
Optimize Inbound SCM
Our research further reveals that several leading companies further developed two strong reasons for this disruptive business model of ‘expertise sourcing (strategic)’ than ‘experts sourcing (tactical)’ to build their case unequivocally and avoid resistance from other stakeholders.
Economies of scale.
- The more economies of scale can be achieved by Outsourcing companies by pool right from the global talents to various other shared resources including infrastructure.
- Existing own resources can effectively utilized for more strategic purposes whereas outsourced resources will manage all operational tasks.
- Outsourcing companies always scout for more market information and keep them abreast of the latest developments.
- This exercise is difficult for the in-house resources due to the limitation.
- Such latest developments will hugely support the Clients in many ways for further cost reduction.
- Outsourcing ensures not only capturing the value but also reduce the risks because it is considered as partnership between two organizations. In employer and employee relationship, there are certain laminations. Employer can only make employee responsible for any loss, if occurred but not make him liable to make loss good.
- Improved visibility in transactions thus ensuring compliances. Compliance is none other than being in accordance with established guidelines or specifications, or the process of a company or a country in which the business is performed. As regulations and other guidelines have increasingly become a concern of corporate management, companies are turning more vigilant. With a proper business engagement with another outsourced firm, Companies can drive their Compliance programs more effectively.
In today’s dynamic business environment, adopting a strategic model of Outsourcing is the most encouraging option to keep your margins steady due to the stiff competition.