Outsourcing – what, why and how?
Outsourcing is most successful in companies which have clearly weighed up the pros and cons of outsourcing. Essentially, this means you are unlikely to achieve your preferred outcome by taking shortcuts.
According to an E&Y study, outsourcing results in average savings of 10-20% a year. If you are going to embark on an outsourcing process and you want to maintain this level of savings over the long term, you need to prioritise planning and make sure you get it right the first time. After all, you will be gaining a partner who will be constantly developing your business in response to changes in the industry.
Don’t sacrifice customer experience
Your choice of partner can make or break the customer experience.
Ideally, your customers should be able to contact the company via several different channels for service and help with problems. Directing customers towards self-service channels not only saves money but also speeds up traditional customer service, where response times have a big impact on the customer experience.
But your customer service approach must apply to all dealings with customers, not just the initial contact or sales process. In terms of collection services, for instance, it is important that customers feel they are talking to an empathetic person who is ready to discuss various solutions. Collection companies have found that in a good customer relationship, customers actually appreciate getting a reminder phone call and it strengthens the customer relationship.
Successful companies are also able to identify different customer profiles and this enables them to continuously improve the customer service experience. Today, data collection and the use of analytics are essential tools for developing efficiency and improving the customer experience.
A full-service solution lets you focus on the essentials
Centralisation is usually the easiest way to cut costs, albeit not the cheapest solution. In a good outsourcing partnership, multiple, if not all, functions could be handled by your partner. You’ll see the biggest benefit when your processes are streamlined and homogeneous.
Your ideal partner is a company which can be entrusted to manage your entire financial administration chain: submitting invoices, accounts receivable, receivables management, as well as financing and retail and e-commerce payment solutions if needed.
Such a partnership allows customers to deal with a single brand, ensuring a uniform customer experience.
Risk and responsibility
In outsourcing, the question of who is responsible for managing risk is often unclear. You should always make sure that allocation of responsibilities is clearly outlined, that there is a service level agreement in place and that the procedure for managing disruption is crystal clear.
Factoring companies have various approaches to risk management: some service providers accept risk, but all too often the customer is left to shoulder the risk alone. The amount of collateral required to obtain financing also varies from business to business.
The same applies to collection: for instance, cost risk is often dealt with by charging collection costs to the client in advance, both for voluntary and court-ordered collection.
By choosing a reliable partner you make sure that your business remains successful and competitive going forward. It gives you the resources, space and opportunity required to focus on the essentials and makes sure your core business remains competitive well into the future.