According to the latest Hfs research, companies are still moving at a slow pace when it comes to outsourcing their processes. This finding is in contradictory to various published reports which suggests that majority of companies today are relying on shared services or business process outsourcing services or both to manage their processes.
From the survey, conducted by Hfs, it was found that over two-thirds of transactional works are handled by the business units itself. Despite of the proven fact that shifting processes to shared services centers or BPO have helped many companies to save cost and improve service delivery, many companies still today limit the scope of outsourcing processes.
According to the survey, 47% of the respondents do not regard accounts payable as their core and strategic process. Nearly 36% of them have excluded payroll from moving to shared service center and about 56% do not outsource their fixed asset processes.
On moving up the chain, some firms in their pursuit for growth have moved their high value processes to shared service center or outsourcing center. While many of the respondents process financial planning and analysis in-house, many outsource tax filing and tax analysis owing to its complexity in processing in-house. It was found that almost 75% of them do not have a hub to outsource financial processes.
What it means to outsource providers and shared service professionals?
The research report is both good and bad for the providers. The good aspect is that, they will have many opportunities before them to expand their business. This will also allow them to innovate new ways to improve the services offered to their clients. The services provider can explore new avenues like the public enterprises where outsourcing concept is relatively new.
The other side of this is that the companies that have not outsourced yet have some real constraints that are difficult to overcome. This will pose a problem for the service providers to bag new deals.
What should be changed?
The companies not into outsourcing their processes should go for an effective change management to implement shared services and outsourcing solutions. The attitude to do nothing so as to be safe must be changed. Companies should engage the stake holders in the change program to make an effective decision.
Service providers on other hand should put efforts to sell the benefits of outsourcing and to design better customer focused solutions. They have to publicize success examples to tap the opportunities. Even though, the outsourcing industry is expanding, there is still much work to be done to grab the attention of the general business if we go by this report from Hfs.