What influences your outsourcing decisions? Beyond cost savings, there are many other reasons that influence your outsourcing decisions. They are as follows,
- Bring in Expertise solutions.
- Improve the quality, of their processes.
- Increase the operational efficiency and
- Help in the overall business strategy.
In addition to above listed criteria, there is a new influencing factor namely, advisors. According to a new report by HFS research, half of the BPO deals are advised now-a-days. Gone are those days where advisors used to roam in search of executives who need expert advice to get them the outsourcing transaction completed. It was reported that most of finance and accounting outsourcing BPO deals signed had the influence of the advisors
The report claims that 49% of finance and accounting BPO deals in 2012 were influenced by advisors when compared to the 26% in the year 2010. As the size of the contract shrinks and companies search for best deals increase, the role of advisors is getting critical for decision making. However, the advisors presence is not usually felt at the execution level.
The companies found that by appointing advisors they are be able to gain market insights and information related to outsourcing that help them in making appropriate decision. By appointing an experienced advisor, they were also able to gain advantage over the vendor on price negotiations, and they could reduce effort as advisors would focus on the outsourcing procedures. The advisors also help them in getting through the compliance and other regulatory procedures without any hassle.
The report highlights few reasons as why advisors are in demand
- Cost effective services: When compared to previous years the services of advisors have become cheaper. This has initiated many small and medium businesses to hire advisors to make outsourcing decisions for them.
- More Information available now: The advisors have more research information from analyst and other sources. This has made consulting easier.
- Negative responsibility: As the top executives are busy in carving strategies to stay competitive, they are not ready to shoulder additional responsibility. This makes them appoint an advisor to make decisions.
- Reluctance by the employees to take intensive tasks: Most of the time it’s the advisors who process the documents for clients and the executive are reluctant to carry out extensive document works.
- Recommendation by service providers: Usually service providers encourage appointment of advisors by the buyer firms as this would reduce their efforts in completing the contract procedures.
Even though, advisors provide insights on the market, it is recommended that companies should develop internal knowledge on outsourcing. Developing the knowledge internally is inevitable for those relying heavily on outsourcing.