Why Outsourcing Turned Out to Be More Cost-Efficient Than Doing Business Without Contractors During the Pandemic

In the unpredictable environment, efficiency issues proved to be particularly important. Galina Shablinskaya (BDO Unicon Outsourcing) explains why companies that were accustomed to using third-party firm services found themselves on the winning side during the pandemic.

THE TEAM FOCUSES ON KEY BUSINESS PROCESSES

Those companies that had outsourced their non-core functions did not worry about timely submission of reporting and calculation of employees’ salaries at the time when the companies had to solve top-priority tasks and to re-arrange their work quickly. Routine processes remained in the provider’s area of responsibility. Thus, the companies had more time and resources to focus on their key functions.

YOU DO NOT NEED TO DEAL WITH HIDDEN ISSUES

The issues that the companies had turned a blind eye to before the pandemic, e.g., difficulties in communication, lack of clear policies for the interaction of departments, etc., were brought to light in the crisis situation.

Incorrectly built up chains of interaction result in wasted time and even loss of customers or key employees. Information security issues may result in high reputational risks and fines imposed by counterparties or public authorities.

Dealing with the provider is work according to regulations: all processes have descriptions, deadlines, persons in charge. This enables to avoid many severe problems.

COMMUNICATION ISSUES ARE SOLVED

Another common challenge for the companies that do not use the services of contractors is organizational issues. The boundaries between work and home life are blurred, it is not always possible to quickly contact workmates, exchanging long messages is not as convenient as simply approaching a workmate at the next table and discussing a task.

When switching to the outsourcing, the communication process changes: the communication channel can be easily changed to the best possible one as it is the company that is responsible for the process, and not just one person or a group of employees.

YOU NEED FEWER HIGH-PAID EMPLOYEES

The reduction of revenue resulted in the need to cut down expenses. Many companies began to pay close attention to the efficiency of high-paid employees, and managers began to closely monitor duplicate functions and look for ways to automate.

The outsourcing of a function relieves the company from the need to put effort and spend money on finding and remunerating a high-paid employee.

More even allocation of projects among the employees, use of resource centers in cities with lower labor costs and economies of scale often make the outsourcing more economically sound than the cost of a function within the enterprise. And if the employee in charge of the customer’s accounting leaves the outsourcing company, they immediately find a replacement, so it does not affect the customer’s business processes in any way.

NO MORE FEAR OF REMOTE WORK

Before the pandemic, many managers believed that if the employees were out of the office, they were not working. The lockdown forced many companies to leave their leased premises for several months. The most flexible companies managed to ensure uninterrupted business processes and to have losses as little as possible.

Outsourcing users understood a long time ago that it is possible to control the fulfilment of tasks remotely: if the accountant does not work in the next office, but in the provider’s office, the employees will still receive their salaries, and the statements will be submitted in due time.

THE ISSUE OF INFORMATION SECURITY IS SOLVED

When shifting to telecommuting, information security is yet another area of concern. How to control the devices at which the employees work and to prevent the leakage of important information? This issue has already been solved by the providers who have been in the market for a long time.

Many major outsourcing companies comply with the requirements of ISO 27001 international information security standards; when hired, their employees sign a non-disclosure agreement; the access to customer financial and personnel data is provided only to those teams that service them, etc. During the pandemic, the responsible providers also comply with all information security rules, e.g. they transfer documents over secure channels.

Source: RBC Pro