Tips to be successful when using outsourced solutions

Tips to Be Successful When Using Outsourced Solutions In order to gain a competitive advantage business organizations rely on outsourced solutions. Here are some tips to be successful when outsourcing.

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Outsourced solutions are helping many businesses to better streamline various internal processes and gain a competitive advantage. Outsourcing including back office outsourcing involves handing over major functions to specialized and efficient providers who perform as valued business partners. This helps organizations to focus more on key functions and also reduce operational cost. When internal resources are freed up, they can be utilized for other purposes. Businesses get to maximize the use of external resources and share risks with the partner company. In the current scenario, the objectives behind outsourcing are more strategic with focus on carrying out in-house activities that add value.

Important Things to Consider for Successful Outsourcing •

Have a clear list of priorities: Companies often fail at outsourcing due to poor focus or improper decisions. So if you are planning to outsource your tasks, then the first and foremost thing is to sort out your priorities in logical order. Having a clear list of priorities helps you to keep track of all the processes and accomplish each these priorities easily.

•

Accept

new

changes

and

technological

innovations:

Technological

advancements occur very quickly and it is very difficult to keep up with the changes. However, businesses have to keep abreast with the changes and embrace innovations and be technologically competitive.

•

Secure legal documents: Once you have decided which company to outsource to, regulatory and legal compliance is a must. The process of securing legal documentation can be long drawn out and lead to delays in business operations.

Legal policies and laws may be different in different countries.

•

Handle your finances carefully: Proper management of funds is crucial. For more proper execution of processes, you may have to spend more money.

Organizations will not earn more without having to spend much. Any cost reduction procedures should be encouraged.

•

Communicate

effectively

with

your

clients

and

partners:

Effective

communication helps in solving a lot of business-related problems. Proper communication is the key to success and to improve the productivity and performance.

An Outsourcing Example – Outsourcing to a DFM Clarifying responsibilities is a very important part of outsourcing, and lack of clarity can pose various risks for clients. Take the case of financial advisory firms, for example. Now there is a growing trend of outsourcing clients to DFMs (discretionary funds manager).

Helen Ball, group distribution and development director for the Tenet Group, said that it

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must be clear which responsibilities are held by the adviser and which by the (DFM) and this must be clearly documented in tripartite agreement.

•

Failure to have clarity can lead to the customer not getting the services they are paying for as both adviser and DFM may assume that certain tasks will be done by the other.

•

It is important to be sure about the cost. Everything has a price and it is important not to place the client with a more expensive DFM solution when a multi-asset fund would easily meet their needs. Discretionary fund management is a service and VAT is payable on everything. This has to be considered when calculating costs.

According

to

Lawrence

Cook,

business

development

director

for

Thesis

Asset

Management, outsourcing to a DFM provides the following benefits to a financial advisory firm: •

Improved profitability

•

Better growth of the business

•

Enhanced client care

•

Deliver consistent outcomes

Mr Cook added that improved profitability comes from opportunity costs and the cost to serve. When the financial adviser is not using a DFM, the advisory firm has to commit to work to support the investment solution. This would involve research, updating the advisory model of the firm’s systems, and updating the client’s portfolio, which requires interaction with the client. All this requires time and resources, which can be saved when outsourcing and spent on more revenue-generating activities (spending time with clients, winning new work, and networking among other things.)

Outsourced solutions bring specific benefits, no doubt. In a financial advisory firm, the ability

to

customize

the

chosen

investment

strategy

to

meet

individual

client

requirements will result in a personalized service the client really values.

The success of an organization in back office outsourcing and other processes outsourcing depends not only on management skills but also on the practices of the business itself. Choosing a reliable vendor is crucial and senior management must surely stay involved during the contract implementation. They should meet at regular intervals to discuss the outsourcing relationship. The working of the outsourcing contract should be closely monitored, problems identified and resolved in a timely manner, and changes brought about to ensure continued satisfaction.

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