For many growing U.S. based businesses, outsourcing is a great solution to work faster and more efficiently for less. If you’re new to the concept of outsourcing or have considered it in the past, you may have encountered some myths about outsourcing and offshore services.
Maybe it's the perception that outsourcing is reserved solely for Fortune 500 companies or massive manufacturing enterprises. Perhaps you can't help but imagine a noisy call center that packs customer experience agents in like sardines when someone says the word "outsourcing." We've been partnering with clients for 35 years to help them navigate the business process outsourcing (BPO) landscape, so it's safe to say we've heard it all: the outdated perceptions, the misconceptions and of course – the outsourcing myths that would make anyone a little hesitant.
The truth, of course, is that BPO is a remarkable tool for organizations that want to reinvest time and money back into their business, and when it's done right it can be a crucial component of your growth strategy. A great place to start sorting fiction from fact is by looking at some common outsourcing myths, understand where they come from and bring the reality of leveraging BPO into sharper focus.
Myth #1: It Reduces Your Existing Workforce
Fact: You can outsource without reducing headcount – and your team might just thank you for it
Bringing a portion of your operations offshore doesn't have to mean a wholesale elimination of in-house positions. Outsourcing is certainly a viable option in reorganization initiatives, but many companies choose to outsource in order to supplement or make the most of the skilled talent they've already hired.
Listen to the Podcast: When Is Outsourcing Your Accounting Needs the Right Move?
Take finance and accounting outsourcing (FAO), for instance. Finance leaders have had to grapple for some time now with a talent pipeline issue. As more CPAs retire than enter the workforce, bookkeeping and transactional roles – like accounts payable and receivable clerks – are becoming increasingly difficult and expensive to fill. They're even harder to keep filled: junior-level roles such as these tend to be filled by workers in the 20-26 year age range. That cohort voluntarily separates from positions early on in their careers at an average rate of 2.3 percent – unless they're in the accountancy profession. Then that number jumps to 10.3 percent, and the cost of attrition can get very expensive.
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If that were the only problem, it would already look pretty dire in the finance department. But even as leaders look to fill roles, the work still needs to be done, which means that the rest of the team must manage a workload that consists of a high level, judgment-based accounting strategy to transactional rework. As you can imagine, it's not great for growth, and can be a perfect recipe for burnout.
Outsourcing these functions can stop the churn, contain costs and create a better quality of life for the team you hired to help you strategize the best ways to make your organizational assets grow. Adding a supportive remote component to an all-star team definitely doesn't have to be about job cuts.
In fact, when money can be reinvested into core competencies, many companies grow, creating even more opportunities for skilled American workers here in the states.
Myth #2: If You Outsource, You Relinquish Control of Your Business
Fact: Using an outsourced provider gives you more time to focus on what matters most.
We can understand where this kind of misconception comes from. After all, just how much control will leaders have over a process that's being delegated to a team that's half a world away? There's actually a really simple answer: the same amount of control they'll have over a process that's being delegated to a team down the hallway.
A good outsourcing partner is one that's transparent and keeps the reins firmly in your hands. They work from your documentation, follow your protocol and aim to meet and exceed your KPIs. You already know you can't be everywhere at once, and most leaders already understand that trying to be can actually put themselves and their direct reports firmly in the weeds.
Finding a partner that's committed to hiring and training talent that will invest in your organization as enthusiastically as your in-house team can make a world of difference. You'll be able to have better control of your business because there's less plates to spin. It's also important to look for a vendor that makes communication with your offshore team seamless, accessible and regular. When an outsourcing provider functions as a partner instead of a gatekeeper, you'll be able to bring your core competencies into sharper focus here at home.
Myth #3: Outsourcing Fails Because of Cultural Differences
Fact: Gone are the days when outsourcing meant navigating through language and culture barriers.
The world is more integrated than ever before, minimizing the effect of cultural differences. Knowing which destination country to focus on when you're in the process of taking work offshore is also absolutely crucial. The Philippines is an excellent example of what genuine cultural compatibility looks like: there's almost no language barrier, due in part to the fact that English is one of the country's two official languages. Over 90 percent of the population can claim English proficiency and because the language is taught early on in an education system that has clear parallels to our own, some Westerners are surprised to find that even accents are hard to detect.
Westerners feel particularly at home in the capital city of Manila, where there are world-class universities, familiar eateries and a workforce that's just as likely to have rooted for the Texas Longhorns during basketball season or be as disappointed in the Game of Thrones finale as you were.
More on Manila: Download a Free Copy of Our Special Report, Destination Manila: Why Outsource F&A To The Philippines
Here's where choosing a U.S.-based outsourcing provider can give businesses a leg up when it comes to cross-cultural teams: organizations can count on a direct line of communication with an American account manager, heading off any potential conflicts.
Myth #4: Outsourcing is Just a Big Hassle - Why Bother?
Fact: In the past, outsourcing got a reputation for cumbersome processes and complex execution, but that’s just no longer the case.
As with all aspects of business to business relationships, the outsourcing experience you have is only as good as the outsourcing provider you choose. We believe that at the core of any B2B endeavor, there are people, so vendor-client relationships that take a human to human approach are the ones that really last and become legacy partnerships. Outsourcing doesn't have to be a hassle. B2B relationships are looking more and more like B2C relationships, with decision-makers and influencers within client companies demanding the same personalized experience, ease-of-access and support they get when making individual purchasing decisions. Outsourcing isn't exempt from this shift, and we happen to think that's amazing!
It's important to remember that you have options. When you're seeking a provider, look for one with similar company culture and shared values. Seek out BPO providers that prioritize building a long-term partnership on a foundation of mutual trust and respect, and don't settle for one that won't build out an experience that's customized to your organization's unique needs and goals.
Myth #5: Only Enterprise-level Companies Outsource
Fact: Smaller and midsize businesses are increasingly outsourcing, especially when it's time to scale
As the fastest-growing market segment across nearly every industry in the over 92.5 Billion dollar outsourcing industries, SMBs are finding that they can use outsourcing as a way to augment non-core teams and add U.S.-based employees at the strategic level, setting them up to break into higher profit margins.
The key? A provider that understands your potential. When outsourcing was just beginning to ramp up in the early 90s, it's true that early models weren't particularly accessible for entrepreneurs and SMB leaders. Thanks in part to the explosive growth of tech startups and "unicorn" app developers with in-house team sizes in the double digits, smart providers saw that opening up the outsourcing model so that businesses that haven't yet made the Fortune 500 list was an opportunity to be a part of something exciting.
A lot of people are surprised to find that Personiv offers FAO solutions that can help organizations like yours grow with a remote team as small as one. We're proud of the fact that we're able to offer this kind of white-glove solution that allows us to offer a product that's tailor-made to fit our client's needs, can grow when they do and never comes with a sacrifice in quality.
We don't ask our partners to try to fit themselves into an arbitrary set of parameters simply because that's "how it's always been done".
We understand that the decision to outsource can be really daunting, and we know that the misconceptions and myths around it don't do anything to make the process any easier. We also know that a single blog post can't cover the entire spectrum of questions around how outsourcing works and who it works best for, especially when it comes to how any of this applies specifically to your company.
Take a Deeper Look with Outsourcing Step-by-Step: Taking The Mystery Out of FAO
If you want more information – a burning question that we didn't cover here, for instance – go ahead and reach out! Drop us a note for a follow-up call or email, or chat with us directly over on Facebook.
We can't wait to hear more about what we can do for your organization.