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August 19, 2020

5 Benefits from Including Outsourcing in Your Pandemic Survival Strategy

The pandemic is a global black swan event. Several industries from retail and transportation to education and healthcare are being rapidly transformed in ways never expected. Most companies acknowledge their operations and contingency plans were ill-prepared for a disruption on the scale of COVID-19. According to Deloitte, over 50% of companies experienced cash flow issues from slowing sales, and 22% had trouble serving their customers.

Yet, within the turmoil, there is a tremendous opportunity. McKinsey's research into past market disruptions found that "companies are more likely to thrive if they act aggressively to capture market share during downturns rather than wait for the recovery."

As companies are grappling with structural changes to their business models, product/market fit and labor needs, leaders are rethinking every aspect of their business from culture, skill/competency models, supply chains to customer experience.

"Although the pandemic is ongoing, we are beginning to see long-term business strategies emerge, primarily the widespread shift to agility and digital. Outsourcing means businesses can scale if needed and bring in new capabilities and fresh thinking quickly and efficiently," said Elliott Jacobs, EMEA commerce consulting director at LiveArea. "As no one can fully understand the implications of COVID-19, companies must invest in adaptability and resilience. Fundamentally, this means developing the ability to understand market change and react instantly."

Companies are re-evaluating the benefits of outsourcers to help them pivot and weather the pandemic storm. Here are five benefits from including outsourcing as part of your pandemic survival plan:

Costs Optimization

Employee-related costs make up a substantial portion of any organization's budget. Access to highly skilled technical talent accustomed to remote working is a cost-effective alternative to hiring and onboarding employees. Outsource teams bring a depth of cross-industry expertise, contacts, economies of scale, and best practices to your business that otherwise would be cost-prohibitive. Whether it's contact center services or technology infrastructure development, the flexibility of scaling up and down resources to meet business conditions is one of the benefits of outsourcing.

An organization can reduce operating expenses by 25-60% by outsourcing non-strategic functions. Companies that outsource non-core business functions can reinvest those savings in areas critical to future survival. According to Deloitte, almost 50% of companies invested savings in improving products or services, 20% invested in technology upgrades, and 14% in process improvements.

Keep Customers Delighted

The pandemic has changed overnight consumer expectations and how they shop. Over 60% of consumers have adopted new digital and contactless services with consumer brands reporting 10 to 40% increases in online customers. These new behaviors are unlikely to change back to pre-COVID patterns when the pandemic is over.

At the same time, customers have set even higher bars for the brands they patronize. The margin for error, communication missteps, and service and product issues is small.

Outsourcing has a long history of helping brands deliver consistent, quality customer service. The benefit goes beyond delivering responsive customer service over the phone and across multiple digital channels 7x24. Outsourcers can help protect brand reputation and, more importantly, provide a continuous stream of insights into how expectations and needs are changing, and what delights and frustrates customers. Those insights are worth more than gold in today's environment of accelerating change and uncertainty.

Be More Competitive

While the pandemic disrupted business operations, the need to continually up 'your game' did not take a hiatus. If anything, the pressure has increased to rethink every aspect of your business to deliver more value and offer a better product/market fit.

96% of companies said that COVID-19 forced them to change their go-to-market models. And 65% of the companies that participated in a McKinsey study shared that new routes-to-market turned out to be more effective in reaching customers than pre-pandemic methods. These new digital marketing, sales, and service processes are here to stay.

Surviving the pandemic requires new ways of navigating innovation and competitive challenges. Outsourcers have a front-row seat at the stage of emerging technologies enabling them to help companies innovate business processes and ways of engaging customers. Leveraging outsourcing’s experience in change management can ensure the successful adoption of your new customer and end-user experiences. The ready access to a pool of experts can help you become more nimble and opportunistic, stepping away when you have mastered the shift.

Accelerate Digital Transformation

According to McKinsey, "Digital interactions are two times more important to customers now than they were before the pandemic." In response, companies can no longer put off digital transformation. "We have seen two years' worth of digital transformation in two months," shares Satya Nadella, CEO of Microsoft.

Companies that embrace digital routes to market and sales models are seeing revenue growth in the neighborhood of five-fold at 40 to 60% less cost. Digital is a business priority, a path to resiliency and surviving the pandemic. As a result of COVID-19, over half of US companies are investing in digital technologies as part of overhauling their business strategies.

One benefit from outsourcing is the ability to rapidly implement new technologies. Outsourcing teams uniquely understand how to determine which emerging technology is right for your business goals. That reduces adoption risk of Artificial intelligence (AI), chatbots, augmented reality, robots, cloud computing, and storage, as well as new industry-specific applications such as touchless commerce.

Reduce Risks

The pandemic redefined risk management beyond financial risk to include supply chain, operational, worker health and safety, and innovation. Gone are the days of managing risk to maintain the status quo.

Today and going forward, risk management is intrinsically tied to long term resilience and agility. Successful leaders must be adept at managing uncertainty and risk across a wide range of functions with an eye toward adaptation. Not jumping on an opportunity, new business practice, organizational model, or technology to address external demand shocks can carry significant risk.

Risk comes from an organization's inability to shift fast and smoothly enough to operate in a new way or at a new scale. In a fluid world - agility, risk mitigation, and innovation are critical to growth. Outsourcing can address all three thereby enabling companies to succeed in this and other black swan events.

Business continuity and disaster recovery is a major benefit of outsourcing. With global footprints, redundant networks and infrastructure, world-class cybersecurity and data privacy, outsources can be the right strategic partner to help maintain continuous operations and serve customers in times of disruption.

Conclusion

The outsourcing benefits of cost savings, risk reduction, and accelerated digital transformation have a multiplier effect. Together with customer satisfaction and innovation, they can create more competitive, agile organizations capable of 'spinning on a dime' in the face of rapidly evolving market conditions. Whether it is new working conditions, routes to market, customer expectations, or new technologies to power tomorrow's business models, outsourcing offers many benefits that lead to organizational resilience should be part of your company’s pandemic survival plan.