Outsourcing “As a Service”

Outsourcing “As a Service” – Dipping Your Toe in the Water

In 2005, Thomas Friedman published the book, The World is Flat in which he gave several examples of how outsourcing was changing the world. Eleven years later, the promise of a flat world where business is done anywhere in the world has led to some real seeming paradoxes, as in:

  • The world’s largest taxi company owns no taxis – that’s Uber
  • The largest accommodations provider owns no hotels – that’s Airbnb
  • The most popular media company creates no content – that’s Facebook
  • The world’s largest movie company owns no theaters – that’s NetFlix
  • A new company that saves on prescriptions but doesn’t fill them – that’s Blink

But maybe your company has never outsourced. Or, you think that your near-term needs are too small to meet the minimums of the large BPO firms. Or, as with many insurance companies, there is a kind of parochial attitude about keeping all work in-house, even to the detriment of your bottom line.

If any of the above is the case with your company, then there is some good news … there are BPO companies that can perform all of the same functions as the bigger ones, but are willing to start small and grow with your needs. I know because I work for one.

The next question you may ask is: what are the services that fall under BPO (Business Process Outsourcing)? They include, but are not limited to:

  • Call center services for sales or customer service;
  • Billing and collections;
  • Accounts receivable and accounts payable processing;
  • Medical and healthcare coding;
  • IT support, programming and web site development;
  • Data input from paper to corporate IT platform;
  • And the list goes on.

Every company has to perform some or all of these functions, yet these are not normally things that contribute to the company’s margin. They are also not usually the “core competency” of most organizations. For example, an auto insurance company makes money through underwriting profit (premium revenue minus losses) and investment income. The so called back office functions are a necessary evil in running a business.

So what’s left to say? Only that in today’s “As a Service Economy”, every company needs to consider outsourcing any function that can be done by a specialized company to provide higher quality and lower costs. And, the ability to perform these functions anywhere in the world at a significantly lower has to be a consideration.