business outsourcing

Should You Outsource? 5 Myths, Facts, and Figures on Outsourcing

Outsourcing has become a popular method of doing business. However, there are still some who are skeptical about its benefits for businesses.

In an effort to clear things up, we have listed down some of the most common myths about outsourcing with explanations on why they are simply not true, and other facts about outsourcing.

Myth # 1: Only large-scale businesses benefit from outsourcing.

Fact: People get this misconception because they see many multinational corporations that have entered into outsourcing contracts. However, the truth is that even small businesses can benefit from it.

For instance, small businesses that have very little to no space in their office to house employees will benefit from just hiring freelancers who can do their work at home. Technology has made communicating with workers from all over the world easier.

In an article for Entrepreneur, Laura Lee Sparks, owner of a small business called Legal Marketing Maven, says that more small businesses are outsourcing tasks nowadays and that “by outsourcing the day to day back-office tasks, the business owner has more time to focus on generating income.”

Myth # 2: Most companies only outsource to reduce costs.

Fact: There is no doubt that one of the driving factors for the decision to outsource is the reduction in costs. In fact, in the beginning, this was the main reason why companies choose to outsource. One survey supports this notion saying that 44% of its respondents outsource in order to reduce costs. However, it’s important to note that those who focus solely on cost fail in the end.

Other top reasons for outsourcing include gaining access to resources unavailable internally (34%), free up internal resources (31%), improve business or customer focus (28%) and accelerate company reorganization or transformation (31%). In the end, aside from cost reduction, what outsourcing really does is help businesses become more efficient.

Myth # 3: Outsourcing only means call centers.

Fact: Call centers to do form part of what outsourcing can provide in terms of customer service. However, customer service tasks are not the only functions that can be outsourced. In fact, studies show that 70% of companies outsource one or more of their strategic business functions.

The top tasks currently being outsourced are bookkeeping, social media marketing, payroll, administrative support, research, and marketing. However, IT remains the most outsourced activity accounting for 60% of all tasks being outsourced.

Myth # 4: Outsourcing means losing jobs.

Fact: In order for a business to be truly efficient there must be higher final output with less input. That’s what outsourcing brings to the table. By outsourcing certain parts of the business to other countries, for example, companies are actually able to provide jobs and help the economy of those nations.

A great example of this would be the growth of the Philippine economy brought about by outsourcing. The country’s BPO industry now employs about a million people and has made the country the second top outsourcing destination in the world.

Myth # 5: Outsourcing is a one-way street.

Fact: Some business owners are hesitant to outsource out of fear that it will lead them to lose control of their business in the future. That should not be the case. In fact, a successful outsourcing contract is built around the premise of a partnership between the client and the service provider. There must be a genuine commitment between the parties to work together in order to achieve business goals. The key here now is in finding the right partner.

The bottom line is that outsourcing can provide many benefits to businesses of all sizes. The important thing to remember though is that you must do as much research as you can to figure out if it will be beneficial to you and if so, find out what you have to do to make it a success.

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Struggling Outsourcing Companies Attractive Targets for Acquisition

The U.S. recession has squeezed onshore outsourcing firms’ revenues. Most are experiencing dwindling client pools, lack of access to credit to finance operations, and fierce competition from offshore outsourcing providers. This makes them attractive targets for organizations seeking to increase their presence in the business process outsourcing (BPO) arena.

This is exactly the opportunity Philippine-based company Ayala Corporation has been waiting for. Recently, the company acquired bankrupt US-based On-site Sourcing, Inc. for $9 million. In an interview with BusinessWorld, Ayala Corporation chief financial officer Rufino Luis Manotok said “The company will focus on investing in the BPO industry. While its growth rate might slow down, the industry will still grow”.

Ayala’s move to buy the bankrupt Virginia-based firm seems to be a wise decision. KPMG, an audit, tax and advisory firm has just released its list of “locations to watch for next outsourcing boom”.  Two cities from the Philippines made it to the list, Davao and Iloilo.

In fact, according to KPMG the 31 cities cited in their report will challenge current well-known outsourcing locations in India and China. Emerging outsourcing destinations in the Asia-Pacific region are attractive offshore destinations for their lower costs, young and educated talent pool, and government incentives.

It’s now up to the local BPO industry to capitalize on their strengths and seize possible acquisitions that could further strengthen their foothold in the offshore market and expand market share.

On another note, India’s global IT-BPO trade body NASSCOM reacted cautiously on US President Barack Obama’s remarks against outsourcing saying US companies had benefited from outsourcing since 50% of their business is overseas.

NASSCOM president Som Mittal bashed on comments blaming outsourcing for the increase in US unemployment rate, citing the latest US state department data on employment which proves job losses in construction, retail and manufacturing were higher than in services, especially in IT. “Compared to other sectors, job losses in the US tech sector were 2.2 per cent as against the overall unemployment rate of 7.2 per cent. The US administration will not do anything that would harm its industry or economy, which is driven by the technology leadership its companies enjoy,” says Mittal.

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Tata Consultancy Services (TCS) Diligenta’s Future Looking Up

With a recent acquisition and two new contracts signed and another two possibly in the works, TCS (NSE: TCS.NS) UK subsidiary, Diligenta, is expecting a positive run for the months ahead.

Indian company, Tata Consultancy Services, Ltd. (NSE: TCS.NS) recently acquired Unisys Insurance Services (UISL), from US-based worldwide IT company, Unisys Corporation (NYSE: UIS).  UISL served as the UK business process outsourcing services arm for the UK life and pensions industry.  The transaction was finalized on the 1st of September.

On the same day, Diligenta announced that it has won two major life and pension contracts; the first is with the Phoenix Group, which is an extension to an original agreement with the company, and will extend the contract until 2018.  The second is a new contract signed with Old Mutual International.  Both contracts are expected to generate 250 million pounds in revenue in the UK, bringing the number of policies Diligenta administers to 5 million from 3.6 million currently.

This is not bad considering that Diligenta was set up four years ago in 2006.  The contract wins boosts the company’s position, positioning it as one of the leading providers within the UK’s life and pensions BPO market, where TCS (NSE: TCS.NS) is the second largest insurance business process outsourcing provider in the UK, second to Capita.

Not only that, but on the 3rd of September, news broke out that at least two more prospective clients have approached the company for potential outsourcing contracts both of which are estimated to be worth more than 100 million pounds each.

“The cycle time for deals to materialize in case of Diligenta is six months to a year, especially for similar deals. So, in the next 12-18 months, we will have something to share. But winning these deals validates our strategy,” said Phiroz Vandrevala, Diligenta chairman and TCS (NSE: TCS.NS) executive director.

With the current contract wins, Diligenta now has three clients since its acquisition: Phoenix Group, Old Mutual International, and the controversial NEST-PADA deal.  The latter is a contract won by TCS (NSE: TCS.NS) on the 2nd of March this year for 600 million pounds.

Based on the recent developments, TCS (NSE: TCS.NS) officials are now forecasting that Diligenta will be able to break even for FY2011.  Diligenta will also be looking to get more deals from the UK government related to pensions and insurance.

According to Mr. Vandrevala, “the U.K. government very clearly understands and realizes that for the economy to grow; inward investment is a question of their survival.  I do not believe they will do anything to upset their applecart in any form or manner.” The statement is referring to the previous fuss that the UK government had generated following the UK elections which had placed the NEST-PADA deal in jeopardy.

Ultimately, it seems that 2010 may be the year TCS (NSE: TCS.NS) can do no wrong.

Author: Audrey B.

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Profit and Loss Management: 3 Ways to Do it Right

For a business to maintain operations, provide better services, and come up with new products, it needs to make a profit. In any business, profit is always accompanied by certain losses. The key is to ensure that profit and loss management is done correctly to help businesses stay afloat and better yet, thrive.

What are Profits? What are Losses?

A profit is an amount of money that is more than its original price. On the other hand, a loss is an amount of money that is less than its original price.

In business, we say one makes a profit when the business makes money or experiences a return of investment (ROI). A business experiences a loss when it doesn’t make money on a product or service but loses part of more than what the owner initially invested.

Profit is making money.
Loss is losing money.

What is Profit and Loss Management?

Profit and loss management is managing income (incoming cash flow) and expenses (outgoing cash flow) to ensure that a business earns a net operating profit.

Usually, profit and loss management deals with profit and loss reports (commonly called P&L reports). You can compare it to a report on how the financial aspect of the business is doing or performing. It helps determine how profitable a business venture is or in the case of P&L projections, how profitable it will be.

Profit and loss management is crucial to help a business stay afloat, project and strategize for its future and improve its performance.  By comparing profit and loss forecasts with the actual performance of other companies—preferably competitors or role models, a business can identify areas they need to focus on or improve on.  For example, is the business spending enough on research and development to ensure that they can stay one step ahead from their competitors? Are they spending too much on expenditures?

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All of these considered, we have come up with three ways for you to do profit and loss management right:

1. Monitor Profit and Loss Reports Constantly

P&L reports are generated on a weekly, monthly, quarterly or annual basis based on a company’s standard operating procedure. However, accountants can generate reports as needed and requested by the management. Take advantage of this and constantly look at the numbers. Look for trends and use them to forecast and project profits and minimize losses.

According to an article on business.org, a P&L chronicles a company’s fight for financial survival, as well as the results of that competitive struggle, during a specific period (quarter, month, or fiscal year). A company’s P&L data shows indicators like revenue, expenses, and net income, or net loss if expenses exceed revenue. Revenues range from operating earnings and interest income to cash generated on investments or in joint ventures with other establishments.

The reports alone can help you make informed business decisions to help your business maximize profits.

2. Combine Monitoring of P&L Reports and Cash Expenditure

Cash is still king, no matter the business type or size. Effective money management shows how a company saves money, grows its existing cash, and averts financial meltdown. This should be managed or controlled efficiently. Expenditures (outgoing money or expenses) should be monitored.

Combined with P&L reports, this helps a business save money during lean months, and have spending power on strong months to invest in new business products, infrastructure, technology, manpower or any aspect that is needed for business growth.

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Developing a business strategy that combines these two will result in effectively managing business income and helps the company “feel” profits when they come in.

3. Outsource Team for P&L Management

It can be hard to generate P&L reports especially when there is too much red tape in the organization. It can also be challenging to do projections on it if you are too involved or immersed in the company. You tend to prefer to stick to gut instinct when making analysis.

Partner with a finance and accounting solutions partner to build a team of bookkeepers and certified public accountants to generate reports strictly from an accounting point of view could give a manager a different perspective. The team can also help develop a business strategy formula to help a business owner understand how to increase or make more money.

There are a lot of factors affecting the profitability of a business and profit and loss management is just one aspect. Effective business strategies, cash managements, maximizing profit and loss based on the company’s strengths are examples of how a business can save money, make money and lessen losses. No matter how much cash a company has or how many assets it owns, losses extending over long periods of time will weaken the value of its assets, decrease its cash holdings and drive it to bankruptcy. Profit and loss management will help a business prevent substantial business losses from happening if done right.

Managing your business’ finance and accounting on your own is taxing and does not always result in favorable results. With our customized solutions, rest assured that all your concerns would be addressed accordingly and at the same time, it would allow you to concentrate on other important factors vital for your company’s growth. Learn more!

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Manila Ranks Top 2 Outsourcing Destination in the World

2014 is a great year for the Philippine Outsourcing industry.  Tholons, a US-based strategic advisory firm for global outsourcing and investments, ranked Manila as the second-best outsourcing destination in the world, with Bangalore still in the top spot for another year. Manila, the only non-Indian city in the Top 5, dislodged Mumbai which was last year’s top 2.

Aside from Manila, Tholons’ Top 100 Outsourcing Destinations for 2014 included 6 other major cities in the Philippines, namely Cebu at 8th place, Davao at 69th, Laguna at 82nd, Bacolod at 93rd, Baguio at 99th, and Iloilo, in spite of being hit by Typhoon Yolanda, remains in the list at 95th place.

Overall, 7 Philippine destinations made it to the Top 100 ranking, while India remains the dominant country with 13 cities in the top 100, 6 of which are in the top 10.

2014 Manila, Tholons’ Top 100 Outsourcing Destinations

It’s interesting to note that Manila has steadily increased in rank from top 4 in 2012, top 3 in 2013, and now, top 2 this 2014. Will this consistent growth persist until 2015, making Manila as the top outsourcing destination the world? We’ll see.

Reports show that revenues of the BPO sector last year have approximately increased by 15% to $13.34 billion, employing over a million Filipinos, plus a projected number of 100,000 more employments this year.

What does this mean for the Philippine outsourcing industry?

This news significantly answers the questions we raised last week, “Is your call center job secured?” Many have raised concerns about the security of their call center jobs when a certain call center in Cebu abruptly stopped its operations at the start of the year. Over a thousand Filipino employees lost their jobs without prior notice, benefits, or not even a hint that the company is shutting down.

An “isolated case” as we called it, this unfortunate incident in Cebu does not change the fact that the industry of BPO companies in the Philippines is still in an uphill climb this year. Ironically, Cebu City still remains to be the Top 8 outsourcing destination in the world in spite of this Cebu-based call center closing down.

This recognition means several significant things. For the Philippines, this means more jobs and increased national revenues. For enterprises around the world, this means greater reasons to outsource to the Philippines. For BPO companies such as ours, this means we have a lot of work to do—to continuously enhance our outsourcing services and to prove that our country is truly a world-class outsourcing service provider.

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The Top 20 Outsourcing Blogs of 2010

The internet is a veritable treasure trove of information and blogs make up a huge chunk of it.  According to Universal McCann, about 64.5% of internet users read blogs.  A staggering figure to be sure considering that as of September this year, there were about 1.9 billion internet users in the world.  In outsourcing, blogs are essential if not even more so, mainly because sentiment towards outsourcing tends to go either way.  With this in mind, we decided to search the internet for outsourcing blogs and compile a list of the blogs that we think deserve to be called one of the top blogs on outsourcing on the internet today.

Infinit-O’s Source department has been providing source management services for almost 5 years and today, they manage over 12,000 sources for our Outsourcing Information Insight platform. We have developed a comprehensive 8 stage process for adding and maintaining specific sources of interest for our clients’ requirements. To do this we classify sources using criteria that are fully customizable to our clients’ needs.

Some criteria are taken into consideration when we generated the Top 20 list include but not limited to:

A. Reputation

  • Site reader following
  • Site comment count
  • Site member count
  • Twitter follower count
  • Facebook fan page count

B. Topic Relevance

  • Determined by articles on the site that mention defined company/industry or topic criteria. In this case, outsourcing industry related posts.

C. Author Credibility

  • The author provides own thoughts/opinion/comments.
  • An expert in the field/industry of topic.
  • NOT simply reposting the news.

The blogs have also been categorized according to:

  • Collaborative Blogs – articles are contributed by numerous authors
  • Company Blogs – articles are sponsored or are written by employees for a certain company
  • Industry Expert Personal Blogs – blogs are written by recognized outsourcing industry experts, and are not sponsored by a certain company
  • Organizational Blogs – articles are sponsored or are written by members of an outsourcing association
  • Service Specific Blogs – are blogs revolving around a certain service under the outsourcing industry

So, without further ado, here is the Outsourcing Insider’s list of the Top 20 Outsourcing Blogs of 2010:

Collaborative Blogs

Global Services is a media platform for the global outsourcing industry, providing information, news, events and expert insights into the BPO and IT industry.

Horses for Sources is the destination for collective insight, research and open debate of outsourcing industry issues and developments.  Three years old and running, the blog is led by industry expert Phil Fersht.

oDesk Blog – Considering that freelancing is outsourcing on a smaller scale, the oDesk Blog is one great resource for tips and advice on outsourcing for the freelance community.

Nearshore Outsourcing in East Europe – Giving a regional take on outsourcing, Nearshore Outsourcing focuses on the news and developments, as well as investigating trends that surround the Central and Eastern parts of Europe.

The Outsource Portfolio blog was created by Mani Malarvannan.  It offers different points of view among the different sectors of the outsourcing industry.

Outsourcing Buzz blog is a great resource for those who want to join a network of people who monitor the developments and trends in the outsourcing industry.

The Outsourcing Weblog offers a wealth of advice about the outsourcing industry as well as providing insight on outsourcing reaching a broader market.

BPO Voice is a blog network for business process outsourcing professionals, including yours truly.  The blog offers, aside from articles on outsourcing, an array of news, views, and services designed to help BPO professionals.

Company Blogs

EquaTerra Blog – Truly advice worth keeping, the EquaTerra blog provides helpful insights into the outsourcing industry, and presents it in a clear, concise manner.

Infosys Blogs – Authored by Infosys employees, the Infosys Blogs offer some insight into the goings-on in Infosys, while providing tips and advice for outsourcers as well as for companies looking to outsource.

Integreon Blog – The blog by Integreon provides detailed information about legal process outsourcing, as well as educating readers on the merits of outsourcing.

Outsourcing Leadership, which is supported by Alsbridge, is a great resource for information, news, and research on outsourcing, offshoring and shared service centers.

SQC-Service Quality Central – Previously known as the QAQnA (Quality Assessment Questions aNd Answers), it is the official blog of the C Wenger Group.  The blog focuses primarily on quality assessment and customer service in the outsourcing industry.

Virtual Observations – The CSI Call Center Blog – The corporate blog of Coordinated Systems Inc, it features news about the company and some tips on how to improve contact center agent performance.

Industry-expert Personal Blogs

CIO’s Inside Outsourcing by Beth Bachelor offers news, opinions and thoughtful discussions on outsourcing in the IT industry.

Pragmatic Outsourcing – Nick Krym author of the Pragmatic Outsourcing blog, shares his 5T’s – Thoughts, Tools, Tips, Tricks, and Traps of outsourcing, in a witty and thoughtful manner.

The Outsourcing Debate – Authored by NOA Director and EquaTerra UK Outsourcing Advisory Services Director, Lee Ayling, The Outsourcing Debate livens up the outsourcing industry as Ayling shares his comments and opinions on the latest in the outsourcing industry.

Organizational Blogs

Outsourcing Russia – A great destination for those who want to read on the growing IT industry in Russia.

Service-Specific Blogs

Legal Process Outsourcing – After only two years of tracking the activity in the Legal Process Outsourcing, Legallyours was already awarded as the Best Lawyer Toolkit Blog by ABA in 2007.

TriNet HR Blog – The blog by TriNet caters to those who are interested in getting insight and information on Human Resources issues, as well as management best practices and leadership tips.

About Infinit-O

A pioneer in Social Media Analytics and Research outsourcing, Infinit Outsourcing’s core team of analysts and researchers can deliver efficiently and effectively, in rapid time, the data your company and clients need. With almost 5 years of experience in sourcing and research outsourcing, Infinit-O believes that a hybrid solution of technology and human complex insight can deliver further in-depth understanding.

At Infinit-O, we offer a multitude of sourcing and research services including source management and categorization, data mining, sentiment analysis, demographic profiling, and data coding.

Learn more about our Source Management Solutions.

Did we forget anyone? Let us know at the comments below!

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How Your Company Can Stay Productive During the Disruptive Holidays

Companies must embrace the holidays and understand that the period between Thanksgiving and New Year, the in-house staff may be physically present but their minds are traveling elsewhere. The holidays are the busiest months in any company’s calendar, but productivity could be decreased while consumer demands increase. This puts your business on the edge as you try to balance respecting your staff’s personal time with their families and keeping the company afloat. 

Ultimate Guide To Reducing Costs Through Outsourcing

One good business decision is to outsource several tasks throughout the year, and not just during the holiday season. This way, even when your staff goes on paid time off or may at least work remotely, your company still keeps working efficiently with a team of specialists that take on specific tasks. 

Moving Forward with Outsourcing

Let’s take the example of a transportation management company that crosses over North America throughout the year. One of their goals is to improve the efficiency of tracking and monitoring shipments across the continent in various offline and online channels. However, due to a high price job market, it was difficult for them to find the right in-house team. They considered outsourcing as a way to help them find the right specialists, and they partnered with Infinit-O.

Infinit-O built a team of highly trained data analysts that track transactions and monitor customer shipments through chat, email and web tracking. They also make sure that freight invoices from different carriers are organized in a database for accounting purposes. Due to their efficient tracking and monitoring strategies, there able to help the transportation company to track each shipment with minimal errors to no errors (98-100% accuracy rate). This has led the company to focus on their core business, even during the busy holiday season, while their Infinit-O team works to keep the company moving along their path to growth and success.

Think Beyond the Holiday Season

It can be challenging to run your business during Thanksgiving, Christmas, and New Year, but with outsourcing, you’ll be able to achieve the following results all year round and especially during the holidays:

  • Cost reduction —  When you partner with a global solutions provider and build a team of specialists, you’re saving on labor and training costs to as much as 70% while getting high-quality results that cater to your unique needs.
  • Access to specialized talent — If you’re having a difficult time finding an in-house team due to a short supply of experts in your country or the salary may be too high for your company budget, outsourcing helps you reach the right specialist for the right job anywhere in the world.
  • Reduced errors — Many B2C companies expect an increase of inquiries and orders, so human errors, especially in managing inquiries and confirming personal or contact information, can happen especially when you’re working with a sparse in-house team. What more during the holidays? Having an outsourced team can help you manage the consumer demands and increased customer service, and reduce errors that could worsen in the long run.
  • Scalability — Related to the reducing errors, your chosen solutions provider moves along with your unique needs. Do you need added customer service agents to handle an increase in inquiries, or an A/R team to evaluate and validate order invoices? If you have any shift in your business, your partner will adjust along with you.
  • Guaranteed performance —  The holidays may be a time when your in-house staff can’t always handle the stress because the business is trying to finish everything before the year ends and meet the demands of their consumers. A solutions provider can quicken turnaround times and keep your business running.

The benefits of outsourcing go beyond just answering the short-term holiday rush. A globally trusted solutions partner can help you sift through any season all year long, giving you endless opportunities to grow and meet the demands of your consumers.

Infinit-O is a trusted solutions partner that can help you build and operate a dedicated team of well-trained specialists specifically designed for your unique needs, with cost savings of up to 70%. We can help you meet your goals, whether they be growth, better productivity or simply bottom-line cost savings. With access to excellent healthcare talent who use cutting-edge technology, we provide some of the best strategic solutions for your business. We are ISO-certified, and GDPR-compliant, so your company and data are safe with us.

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How Small & Medium Businesses Can Grow with Outsourcing

A large number of enterprises in the United States alone are small and medium businesses (SMBs). While entrepreneurs who’ve left offices to start and grow their own businesses feel success is underway, they do feel bogged down by problems they have a hard time solving by themselves. When they feel more pressured to spend more on all kinds of improvements, their expectations may lead them to overhaul their strategies or just close shop completely.

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3 Practical Ways to Create Intelligence Reports for Smart Business Strategies

In today’s highly competitive, digital market, any company requires updated data and a thorough analysis that will lead the way to actionable items. Business intelligence reports use services and software that turn data into actionable insights that your company can use for both its tactical and strategic decisions. A thorough business intelligence report will provide stakeholders and managers the key information and analysis around these findings in the form of graphs, charts, summaries, reports, and dashboards.

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5 Trends That Will Advance the Coverage and Value of Outsourcing in 2020

Small to medium businesses have limited financial and operational resources. They need to focus their budget on profit yielding investments and direct efforts toward business growth. Most of the time, it is a challenge operationally to manage in-house staff for additional but equally integral tasks such as customer support, IT, and accounting. Outsourcing is a cost-effective way for SMBs to execute these integral functions without overspending.

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