Business Process Outsourcing for SMEs
Empowering your Business
Outsourcing is a Key Management Tool
for Companies of all Sizes
Business Process Outsourcing (BPO) has become a major driver of performance
in business today. Companies of all sizes and in all industries are realising the many
benefits of transferring non-core activities to specialist service providers. In the drive
to increase profits and productivity it's important to focus on core operations and value
With non-core activities taking up valuable management time it can be difficult to stay
competitive, more so in the current economic environment. Working in a collaborative
partnership to ensure successful outsourcing and releasing your team members from non-
core activities can significantly reduce your operational costs. Management thinkers such
as Peter Drucker and Tom Peters summarize this position as 'do what you do best and
outsource the rest'.
Traditionally the preserve of large corporations and multinational organizations,
outsourcing has now become a very real strategic management tool for small & medium
size enterprises (SMEs). Large scale providers of business process outsourcing services
such as Accenture, IBM & HP tend to focus on the economies of scale available from
working with very large clients.
The need for SMEs to actively engage with BPO providers has never been greater.
On March 2 2009, the Department of Enterprise, Trade & Employment released figures
showing that 300 jobs a day were being lost in the private sector. With this in mind,
companies of all sizes need to reexamine BPO and understand that it is a strategic
management tool which impacts both the top and bottom line of your organization as
well as improving customers' interactions with your firm. In addition, staff previously
concerned with non-core activities can be reassigned to revenue generating tasks, further
enhancing your top line.
Unfortunately, the past few months in Ireland has seen many high profile job losses as
the global downturn exacerbates the uncompetitive nature of our economy. In most of
these cases, when the organization in question has commented publicly, it has cited the
high cost of doing business in Ireland.
The Business Process Outsourcing industry has changed dramatically over the past few
years. BPO is no longer primarily concerned with cost reduction or 'your mess for less'
BPO is now
as BPO assignments became known within the industry.
primarily focused on real & sustained increases in
customer satisfaction, productivity and profitability.
Terms like 'Business Processing Outsourcing' can seem abstract and/or of no relevance
to some business owners & managers. With this in mind, it is incumbent on firms like
Evolving Group to clearly & concisely articulate what BPO is and how it can effectively
work for your organization.
From our state-of-the-art delivery centre in the beautiful, historic city of Krakow in
Poland, Evolving Group is working with client partners of all sizes and in a broad range
of industries to deliver savings of 30%-50% across a wide range of service lines:
· Customer Interaction Management (i.e. handling all your customer
· 24/7 Technical Support (Tier 1, 2, 3 & 4)
· Web Design & full Internet & e-Commerce solutions
· Graphic Design
· Finance & Accounting Solutions
· Debt Recovery Services
· Back Office all your Document & Data Management needs
Outsourcing is not about what you can subtract from a business. It's about what you can
add. Leo Blennerhassett, Managing Director of Accenture Ireland, the Irish arm of the
global leader in BPO, was recently quoted in an interview: 'The trend to outsourcing is
real and companies are looking to improve their overall health by transforming their
business on both a strategic & tactical level'.
Research by Gartner, the world's leading research firm, indicates that BPO will achieve
double digit growth in the coming years as more and more organizations, of all sizes and
from all industries, turn to BPO providers to reduce costs, drive revenue, enhance
customer service and eliminate non-core activities from within their firms.
Outsourcing is now an essential tool for every organization. Ongoing research from
Accenture, into the characteristics of high performance, has found that outsourcing is one
of the key enablers of high-performance businesses and governments. More and more
decision makers are turning to outsourcing to help them elevate their organizations'
performance, driving value into their enterprises and driving cost out. Evolving
Outsourcing's services touch an ever broadening range of industries and business
At Evolving, we are transforming existing processes
for our clients, making them leaner, smarter & faster
and, critically, we do this while reducing costs.
Why outsource? What are the benefits to my business?
Substantial cost savings, both in terms of labour & capital:
o The concept of fully loaded cost is central to BPO. In many cases clients will
only think of the cost of labour when attempting to establish the cost to the
business of having Person X performing tasks A, B & C in-house. However, it is
critical to factor in the costs associated with hardware, software, furniture,
stationary, salary contributions, management, training and so forth in order to
accurately understand the true cost of this person to the organization i.e. the
fully loaded cost. By partnering with a specialist BPO provider you eliminate the
need to recruit & train new employees as well as cutting down on administration
& HR management costs
Acquiring 3rd party expertise by partnering with specialist service providers:
o As we head into what has become known as the 3rd Generation of Outsourcing,
the emphasis has long shifted from pure cost reduction to performance
improvement. BPO providers are specialists at the services they provide and, as
such, can deliver improved service quality to our clients' customers.
Ability to focus on core competencies:
o By allowing your BPO partner to handle some or all of your non-core activities,
your own in-house team can refocus all time, energy and resources on activities
directly linked to your top line. In the current climate this is particularly
important as the need to have all team members focused on sales & revenue has
never been greater.
Culture of continual improvement:
o The idea of continual improvement is central to BPO. BPO providers ought to
practice what they preach and be constantly seeking to refine & improve
business processes for existing clients leading to continuous and increased gains
for client partners.
Increased market flexibility & reduced time-to-market:
o By partnering with a BPO provider, firms enable themselves to become leaner,
more dynamic and more agile. BPO providers allow client firms to scale quickly
in response to increased demand and/or new services/products or promotional
campaigns. This is imperative in today's economic climate.
Identifying the right BPO service provider requires time, due diligence and clearly
established and communicated goals and objectives.
A successful relationship will be one that lowers
costs, increases service levels and improves
satisfaction among your customers.
We work with our client partners to develop & deliver business process innovations
through outsourcing services that transform their enterprises and deliver high
performance at lower costs.
Key to all of this is understanding & recognizing the critical role of relationships in
BPO discussions. There needs to be a level of trust to hand over one of your business
processes to an external specialist provider. Evolving Outsourcing seeks to cultivate long
term, partnership-based relationships with all our clients. Our goal is to become
seamlessly embedded in our clients' organization and to be regarded as trusted partners
by all companies with whom we deal. This requires trust. Trust is earned and
relationships built through superior performance & exceeding expectations, day by day.
BPO is not a new concept. As far back as 1999, Bill Gates was quoted in Time
Magazine as saying: "As a business manager, you need to take a hard look at your core
competencies. Revisit the areas of your company that aren't directly involved in those
competencies, and consider whether Web technologies can enable you to spin off those
tasks. Let another company take over the management responsibilities for that work, and
use modern communication technology to work closely with the people - now partners
instead of employees are doing the work. In the Web work style, employees can push the
freedom the Web provides to its limits".
If 'web technologies' could facilitate the outsourcing of non-core business processes back
in 1999, then business owners & managers need to think long & hard on what can be
done now, ten years later, given the exponential advancement of web-based businesses
communication and collaboration tools.
Leading organizations excel because they seize every
possible opportunity to gain competitive advantage.
In today's marketplace, organizations simply must cut costs and create new streams
of revenue not only to thrive but to survive. By outsourcing some or all of their non-core
support operations organizations save money, substantially improve service levels, and
focus resources toward initiatives that generate profitable growth. As a result, they
leapfrog competitors who remain bogged down by inefficiency and rigidity and establish
new levels of business success. Management writer, Peter Drucker, summarised this
position quite succinctly when he wrote 'the entrepreneur always searches for change,
responds to it and exploits it as an opportunity'.
Our starting point at Evolving Outsourcing is to ask ourselves 'what value can we bring
to this company?' We are not interested in 'elbowing' our way into an organization in
order to 'sell our wares'.
In every first meeting with a potential client we ask
the questions 'what can we do for you?
How can we help you?' We listen.
We are in the business of consulting, never hard selling. Business Process Outsourcing
is a complex undertaking and it is vital to choose the appropriate partner for your firm
and your objectives. In the case of Evolving Outsourcing, we provide our services from
our state-of-the-art delivery centre in Krakow, Poland.
In BPO speak, Krakow is considered a nearshoring location as opposed to an offshoring
location. Nearshoring locations like Krakow are characterized by relative proximity
to the client country (i.e. Ireland) in terms of geography, time zone, culture (values,
behaviours & attitudes) and language (incl. accent). Examples of offshoring locations
include India and China. The nearshore Vs offshore decision has significant implications
for the SME business owner.
Practical implications such as a monthly or bi-monthly site visit are entirely feasible
from a time & cost perspective if we are speaking about a nearshoring location such as
Krakow. A business owner can fly from Dublin, Cork or Shannon on a weekday morning,
be collected at the airport, brought to the delivery centre for the day and be back at
their office 24-48 hours later. This is simply not possible with an offshoring destination
such as India. All of these practical considerations must also be added to the mix when
engaging in a BPO decision-making process. Practical considerations such as the
above-mentioned site visits coupled with the communication advantages of a one hour
time difference and cultural and linguistic similarities must be carefully weighed against
a purely lowest cost-driven decision i.e. offshoring locations such as India and China, as
well as emerging destinations like the Philippines, will inevitably win the battle from a
purely low cost perspective.
At Evolving Outsourcing, we took the strategic & tactical decision to locate our delivery
centre in Krakow as we feel it provides us and our client partners with a very strong
'best of both worlds' scenario. We can offer significant cost savings & performance
improvements from a strategically located city which is renowned for producing world
class graduates (Krakow has 7 universities). Krakow is regarded as the 'Silicon Valley of
Poland' and the 'Oxford of Poland' and this was central to our decision to locate there.
Tholons, (www.tholons.com) a leading global strategic advisory firm focused on the
Krakow the 5th most attractive
outsourcing industry recently ranked
city in the world and 1st in Europe for outsourcing in their report -
'Top 50 Emerging Outsourcing Cities'. In assessing the cities' levels of attractiveness as
an outsourcing destination, the research examined such criteria as the quality and
availability of human resources, education levels, costs of running a business, business-
related risks, investment climate, infrastructure and quality of life.
Follow the leaders...
Many of the world's leading Outsourcing and technology companies have already
set up operations in Krakow:
IBM Outsourcing Cap Gemini
General Electric Google Research Labs
BP Shared Services Centre Shell Shared Services Centre
Philip Morris Outsourcing Centre HCL
Evolving Outsourcing is part of Evolving Group, a multi-lingual, full
service HR Services, Training & Outsourcing Company. Supplying more
than 300 companies in over 15 countries with Outsourcing, Recruitment
and HR solutions. Our clients, ranging from large multinationals to small
and medium size enterprises, are located throughout the EU, Canada and
the Middle-East. 84% of our clients are involved in repeat business with
us. Our Business Process Outsourcing solutions include Customer
Interaction Management Solutions, Back Office Document & Data
Management Solutions, Finance & Accounting Solutions, IT Support
Solutions and Internet & e-Commerce Outsourcing Solutions. Within
Evolving Outsourcing we have a dedicated SME division which consults
with business owners & managers. To see how BPO can assist your
business, contact us for consultation at firstname.lastname@example.org
About the author: Brian O'Brien B.Comm., MSc. is Managing Director, Evolving
Outsourcing and Business Development Director, Evolving Group. Having
previously lived in Krakow, Poland he has relocated to Ireland to head up
Evolving Outsourcing's push into the Irish & UK markets. He always welcomes
an opportunity to discuss BPO requirements and can be contacted directly at
email@example.com or www.linkedin.com/in/brianobrienireland