Outsourcing – still a solid strategy for business

Outsourcing, which started in the early ’90s as a revolutionary phenomenon of sending unskilled work from developed countries to developing countries, has experienced tremendous growth over the past decades.

The biggest change in outsourcing has been that it’s no longer associated with ‘offshoring’, i.e. to outsource a necessary and key business function does not mean sending it to India (for IT support) or Philippines (for call centre management) or China (for manufacturing).

Industry experts, who have been studying the disadvantages and advantages of outsourcing, feel that the future of outsourcing will continue to remain secure mainly due to the benefits that outsourcing brings to the business.

What’s the upside and downside of outsourcing?

 

First, the upsides of outsourcing include:

Swiftness and Expertise – Most of the times, tasks are outsourced to companies who specialise in their field.

Concentrating on core process rather than the supporting ones – Outsourcing the supporting processes gives the business more time to strengthen their core business process.

Risk-sharing – one of the most crucial factors determining the outcome of an outsource campaign is risk-analysis.  Outsourcing certain components of your business process can help the business to shift certain responsibilities to the outsourced vendor.

Reduced Operational and Recruitment costs – Outsourcing overcomes the need to hire individuals in-house; hence recruitment and operational costs can be minimised to a great extent.

 

On the flip-side, some of the downsides of outsourcing are:

Risk of exposing confidential data – When a business outsources HR, payroll, recruitment services, or any other non-core function, it involves a risk if exposing confidential company information to a third-party.

Synchronizing the deliverables – In case you do not choose a right partner for outsourcing, some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate solutions that may conflict with company culture and values.

Lack of customer focus – An outsourced supplier may be catering to the expertise-needs of multiple businesses at a time – it may depend where you are on the pecking order that determines what level of service you receive.

Regardless though, it’s now widely acknowledged by industry experts and commentators that if a function in your business is regarded as non-core, then outsourcing it is most likely the best business decision.

One area that time and time again comes up is WHS (Workplace Health & Safety).

Everyone expects to go to their place of employment and leave that same place in good health.  This is a given.

However, what happens when an employee gets injured?

If you are a large construction or mining operation, then most likely you’ll need in-house WHS resources.

Yet, what about the thousands of small-medium businesses that may not operate in high-risk environments, yet still employ people, who in the course of their duties, may sustain a workplace injury?

Dealing with an injured worker such that she is treated and cared for to allow for a safe and productive return to work is a highly specialised skill.

The State Insurance Regulatory Authority prescribes in detail the requirements of a Return to Work coordinator.

WRM can fill the functions of a Return to Work Co-ordinator for companies that are required to have one by law without the need for having a full-time person on the employee payroll.

Accidents and workplace injuries will happen – the question is how equipped and prepared are you to deal with such a situation?

If you’d like to know more, contact Libby at libbyroberts@wrm.net.au or visit us at www.wrm.net.au, alternatively, you can call on (02) 9893 1877.