5 benefits of outsourcing for the new year
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Outsourcing is a practice involving the delegation of certain functions or processes of a business to external specialized firms. The Business Process Outsourcing (BPO) market in Europe is experiencing significant growth primarily due to customer preferences, local conditions, and macroeconomic factors. As companies continue to seek ways to reduce costs and improve efficiency, the demand for BPO services will continue to rise.
Poland is gaining increasing recognition as an attractive location for outsourcing services, especially in areas such as IT, BPO, finance, and other professional services. Factors contributing to this include the high level of education among the workforce, proficiency in foreign languages, and relatively low labor costs.
Source: Statista, https://www.statista.com/statistics/1402476/cee-number-of-bpo-ssc-gbs-it-and-randd-centers/
When and for whom is it worth using outsourcing?
For which companies can outsourcing be most advantageous? Contemplating the potential benefits that outsourcing offers to entrepreneurs, one must undoubtedly take into account the nature of business activities, needs, and challenges that the company faces.
A greenfield investor will obtain completely different benefits, a Shared Service Center (SSC) in the phase of stable operation will experience different advantages, an IT Delivery Centre in the peak production phase will have distinct benefits, and outsourcing to a manufacturing company under the so-called 'headcount freeze' (lack of new positions) will bring yet another set of advantages. Therefore, there can be many different reasons that encourage utilizing the services of an external company, depending on the type of business we run and the stage of its development - comments Dominik Kalinowski, Head of Outsourcing, Antal IT Services.
Superpowers of Outsourcing
One of the main driving factors behind the BPO market in Europe is customer preferences. Many companies outsource non-core processes to external providers, such as customer service, HR, or finance. This allows businesses to focus on their core competencies and, in turn, reduce operational costs. While there are many benefits to outsourcing, listing five universal and fundamental advantages is worth mentioning:
- Flexibility: By entrusting a portion or the entirety of a process to an external company, a business gains quick access to competent resources and a range of tools that the provider uses continuously in service delivery.
- Cost: At first glance, outsourcing may seem more expensive, but when looking at the topic comprehensively—subtracting the costs not incurred with outsourcing (recruitment, onboarding, benefits, personnel management, leave, illnesses, termination costs) and considering tax benefits—outsourcing reveals its better side, offering potential savings for the company.
- Efficiency: Providers with the right know-how guarantee more optimized service delivery, usually using fewer resources or in a shorter time. The efficiency brought by credible providers can also be applied to the stability of teams performing services. A good provider cares about its staff, satisfaction levels, and project stability.
- Security: When undertaking a new project or one unrelated to a company's key area of activity, it is advisable to leverage the resources, competencies, and experiences of specialized firms in that particular field. Field sales teams, accounting, marketing, payroll management, HR – these are just a few areas worth outsourcing. An experienced partner and shared goals ensure the highest quality of expertise for the company.
- Development: Utilizing outsourcing often opens up new areas of activity for companies, which they execute through their subcontractors. Development is also associated with the obvious transfer of know-how. Using the Build-Operate-Transfer model in the Shared Service Center (SSC) area, for example, it is possible to quickly build a team to carry out a new process, calibrate it to the appropriate level, and ultimately transfer it entirely to the client's internal structures.
Outsourcing in 2024 – what trends can we expect?
The BPO market in Europe is developing very dynamically, and already, we can observe the emergence of new trends that may dictate the directions of industry development in 2024. We are already witnessing the growing significance of "nearshoring," which involves outsourcing a part of the business to an external provider located close to the target market. This allows companies to focus more on finding local partners, contributing to the reduction of cultural distance and enhancing communication efficiency. The new year may also bring increased flexibility in adapting business models in the BPO industry. Both providers and clients, thanks to outsourcing, can dynamically adjust their strategies to the rapidly changing business environment.
