Outsourcing operations

I listened to several Bill Kutik’s radio shows and decided to write about the 51st one which is about business process outsourcing (BPO). Phil Fersht is the guest in that show and he is starting his BPO consulting business. He mentions the risks that companies run sending their operations outside and I agree in part because you have to understand the part of the business that you outsource and what you keep in house. Certainly, having friendly software that makes the company processes more efficient sounds like a better compromise. On the other side, I think that outsourcing your operations might help you to focus in improving and marketing your service/product.

Benefits administration is the most outsourced side of HR, in part because it involves specific knowledge of laws and regulations. Recruitment is also frequently outsourced because is very time consuming, but the company has to balance the fees and frequency of hiring when making decisions related to do business with staffing firms. That kind of business turns to be expensive if you have a high turnover because of lack of career opportunities in house, or lack of management, or competitiveness. At the end of the day, the organizational culture will determine who stays, who leaves and why.

The outsourcing industry has a variety of specializations and I think that the concentration of knowledge that they have adds value to the customer who might not have specialists in house. However, it’s not for every organization and definitely you have to know your business and part of that is using your resources as employees skill set to cut costs, improve productivity, climate and moral!