Outsourcing Work During The Coronavirus: Why BPO Matters More in Crisis

Outsource
August 5, 2020
4
min to read
Janine Griffiths

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The coronavirus and the subsequent lockdowns have presented many unexpected operational and financial challenges for businesses. Even companies that have streamlined efficiency by reducing spending and cutting back on unnecessary functions are struggling to cope with the increased pressures that this has presented.

Almost every organization has repetitive, ongoing processes that can potentially distract from core business opportunities. In today’s uncertain environment, that could contribute to financial difficulties later on down the line.

Outsourcing is one way that businesses can potentially side-step these issues and free up time to focus on more profitable activities, such as marketing, or attracting new clients.

In this blog, we’ll take a look at what outsourcing is, why businesses should consider it and how it can help companies overcome these unique challenges posed by the pandemic.

Outsourcing: What Is It and Why Does It Matter?

Outsourcing is the business practice of hiring an external organization or individual outside of a company to provide services or operations that would usually be carried out internally.

Some of the tasks that are commonly outsourced include payroll processing, lead generation, data transformation and inventory management, among other things.

There are many different ways of outsourcing work. Some companies opt for freelancers, while others use freelancing platforms such as Upwork and Fiverr. The trouble with many of these platforms is the work can vary greatly between freelancers and the speed of work can also vary. 

This is why for many organizations it can be more beneficial to enlist the services of a reputable outsourcing and machine learning company that is specifically designed to take on rote tasks on a scale that is impossible to achieve with smaller freelancing platforms.

Outsourcing can reduce labor costs significantly because external organizations will have their own compensation structures and business models which enable them to complete the work for less money.

For example, Invisible created a unique form of outsourcing known as Worksharing which blends labor and automations for SMBs and Enterprise Teams. Essentially, it takes on common business processes and everyday tasks and combines machine learning, human oversight and RPA to complete tasks quickly and efficiently. 

The aim of outsourcing is to alleviate busy teams from tasks that drain time, money and resources, which are the three main commodities in today’s fluctuating markets. 

Importance of Outsourcing During Crisis

There is no doubt that we’re living in unprecedented times. Thanks to the coronavirus and civil unrest, the world has changed on a scale never seen before. Old paradigms are shifting in favour of healthier, safer and more considerate workplace practices. Unfortunately, this has also resulted in increased costs, red tape and operational pressures.

When you combine that with the economic slumps and reduced income that businesses are experiencing, it’s no wonder that many find themselves wondering how they will survive the next few years.

While there are various complex financial and practical solutions to these problems, one of the things that businesses can benefit from right away is outsourcing. 

Outsourcing non-core activities improves productivity in the long run because external and purpose-built companies can perform these smaller tasks better than the firm itself, which leads to faster turnaround times and increased competitiveness.

But those are not the only advantages. There are many other ways that outsourcing can benefit a business during a crisis:

Technological Advantages

One of the most underestimated advantages of outsourcing is that it gives you the opportunity to enter into partnerships with companies that have access to more resources and advanced technology. For example, if you were to outsource data ops and transformation to a tech company that has access to the latest machine learning and automation software, this would give you access to technology that might otherwise incur additional expenses. 

Increased Efficiency

According to a study by IDC Research, inefficient processes cost organizations up to 20-30% of their annual revenue.  For example, IT departments spend 30% of their time on basic low-level tasks, while 50% of companies spend $5-25 per manually processed invoice.

One of the easiest ways to address these inefficiencies is by outsourcing the repetitive, time-consuming and ongoing functions that eat up valuable time and resources. Getting another company to take on the grunt work frees up significant amounts of time for teams to focus on scaling, innovation and growth-orientated tasks.

A survey by Deloitte, showed that 57% of business leaders reported that outsourcing made it easier to focus on core business tasks, while 47% stated that it solved capacity issues. 

Cost-Savings

Many businesses - particularly smaller to mid-sized organizations have taken a financial hit from the pandemic due to closures and lockdowns. Some companies (as of the time of writing) are still closed as not all restrictions have yet been lifted.

Therefore, saving money is more important than it has ever been for smaller businesses and outsourcing is one easy way to cut back on in-house expenses. 

According to a study published by the PwC, 68% of companies said that outsourcing reduced costs at their organization. Moreover, companies that outsourced payroll functions saved 35%, while those that outsourced HRIS services saved 50% when compared to in-house costs.

Access to Top Talent Across the Globe

Finding and attracting top talent has always been a challenge for most companies. However, the travel lockdowns that have occurred as a result of the coronavirus has only made things more difficult. Although it would not have made a significant difference to companies that have previously established a remote working structure for their employees, there are other companies that have struggled to keep up with these new changes. 


Outsourcing repetitive business functions is one way that businesses can get around this problem. It gives you access to a flexible workforce independent of your location. It means you can avoid the red tape, health insurance and monthly labor costs associated with hiring. Instead, you gain extra bandwidth during the busy periods and you’ll also have the flexibility to bring on and get rid of labor as and when needed. This gives you a high degree of flexibility that isn’t possible with traditional employment structures.

Risk Reduction

Outsourcing tasks means that you share the investment and labor risks with your partnering companies. This is one of the reasons why it is important to choose a company with the experience and skill to help manage these risks effectively. 

Competitiveness

It can be difficult for smaller companies to attract top talent and gain the resources they need due to limited bandwidth and resources. This is even more problematic during times of crisis or economic uncertainty.

However, outsourcing evens the playing field for smaller companies because it gives you access to the workforce, technology, resources and skills that would not otherwise be possible. It is one of the easiest and most affordable ways to offer your clients access to the same expertise, resources, and services that they would get if they purchased from a bigger organization.

Which Tasks Can Be Better Outsourced?

It is possible to outsource virtually any ongoing, repetitive task that you can explain. 

Functions that require limited real-time interaction, can be scaled easily and broken down into a set of clear, action steps are the easiest to outsource.

Common tasks include data transformation, lead generation, customer outreach, contact management and more. These are only a small section of tasks that can be easily delegated. 

But at a time when the financial survival of businesses is still somewhat restricted due to the coronavirus, the most useful tasks to outsource are the low ROI rote functions that can be converted into revenue generating tasks.

These include the following:

Lead Generation

Curating leads is rarely as simple as it sounds, particularly if you have an uncommon niche. It gets significantly more difficult during times of crisis or economic uncertainty. Finding a decent sales team to do this for you is like finding gold dust nowadays and the degree of salesmanship varies widely.

However, a specialist company such as Invisible can utilize public and private sources to deliver organized and warm prospect lists and follow up until a sale is made. This saves significant amounts of money on hiring sales teams and makes it much easier to continue generating revenue, which frees up time to focus on scaling and growth.

Customer Service

Answering basic customer requests and striking the right balance between automation and human oversight can be a delicate one for most businesses. For example, while research shows that chatbots can cut operational costs by up to 30%, businesses risk alienating customers if they fail to respond correctly.

After all, we’ve all encountered annoying those chat bots that fail to address or understand basic commands or concerns. According to the Drift and SurveyMonkey Audience 2019 State of Conversational Marketing report, just 36% of people had a good experience with chatbots, compared with 39% who said they had a positive experience with a customer service agent via an online platform. 

The research also showed that with the exception of getting 24-hour service, respondents said live chats with human beings outperformed chatbots for a variety of reasons.

But speed is also important, with 42% of survey respondents expecting immediate responses from chatbots, compared to 39% from one-on-one video calls and 11% from forms.

The problem is, achieving the right combination of speed, chat bot interaction and human oversight can be incredibly difficult and technically complex for businesses. By outsourcing these functions to a tech company with dedicated resources, businesses can relieve themselves of much of the burden and obstacles that limit scalability in these areas.

Accounting & Finance

Few things are as stressful as keeping up with all of the invoicing, bookkeeping, analysis, financial reporting, planning, and transactions. Moreover, most of these tasks need specialist software in order to ensure accuracy. Of course, it is possible to hire an in-house team to do all these tasks for you, but outsourcing them can help a great deal in growing the company during the pandemic.

If you are concerned about the possible risks associated with essential financial functions, you can always start by outsourcing low-value tasks first in order to pilot the service.

Another major area that can be outsourced is insurance BPO services to expedite claims, accelerate quotes and speed up applications and underwriting. For example, Invisible previously helped one insurance provider to tackle a backlog of over 4,000 applications in the span of just a few months.

According to research published by Bill.com in conjunction with the CPA, 80% of companies that outsourced their accounting functions said it gave them more time to focus on other areas of the business. Moreover, 30 percent of companies that outsourced accounting reported that it helped them to increase profitability.

Operations Management

Over time, back office and operations duties can build up and restrict growth. These can include things such as IT, admin, document workflow management and other rote tasks that can eat up the vast majority of time. Most businesses simply can't afford the ongoing expenses that accrue as a result. So it makes sense to outsource these functions to free up more resources to focus on innovation.

HR & Payroll

The costs of advertising vacancies, chasing talent, scheduling interviews and dealing with the back and forth associated with employment can be prohibitive for businesses. 

According to the Society for Human Resource Management’s (SHRM’s) new Human Capital Benchmarking Report, the average cost per hire for companies is $4,129. This does not include the costs of vetting and hiring a recruitment firm, reimbursing tuition, salary increases, retirement and healthcare.

As a result, some businesses simply cannot afford to employ  the staff they need to take the business forward.

For these companies, it is incredibly advantageous to use an outsourcing company to fill in the gaps. At Invisible, we use custom sources and qualification specs to build candidate lists that match the exact needs of our clients. Afterwards, we reach out (using our client’s chosen platform) to engage top candidates and add them to the interview calendar. 

Which Industries Benefit The Most From Outsourcing?

Pretty much any industry can benefit from outsourcing, because most businesses have a backlog of ongoing, rote tasks that eat up time and money. However, the 3 biggest sectors that we work with in the current climate broadly fall under the following categories:

Marketplaces

One of the biggest challenges for most marketplaces nowadays is liquidity. Improving the efficiency with which buyers are matched to sellers on a platform is an ongoing priority.

Various metrics are used, depending on the type of marketplace. Broadly speaking, marketplaces fall under 3 different categories, namely: 

Double commit - this is where both suppliers and sellers need to opt in for a match to occur. Craigslist is an example of this type of marketplace, because users need to message back and forth in order to complete a transaction.

With this type of marketplace, substantial time and effort is required from both the supplier and seller, resulting in a lower conversion rate. Therefore the main priority for double commit marketplaces is ensuring this process is streamlined in order to improve the search-to-fill rate.

Buyer picks - with this type of marketplace, a buyer can book a service or make a purchase without having to interact with the seller. An example of this is Airbnb and Unwind.me.

For this type of marketplace, understanding the utilization rate of the supply is essential. This is because suppliers with low utilization rates are less likely to stay on the platform, because the majority of their income is not generated through it. Therefore, generating the right type of data to understand this metric is essential for buyer picks marketplaces. 

Marketplace picks - this is where the marketplace takes the responsibility of matching both buyers and sellers. Examples of this type of marketplace includes Uber and Deliveroo.

This type of marketplace needs a high degree of standardization to work as the marketplace takes on all of the responsibility for ensuring the platform runs smoothly for both buyers and sellers. Therefore, measuring the quality of service and time to fill rates is essential.

All of these marketplaces have the same problem: getting access to actionable intelligence in order to understand and explore these insights properly. Outsourcing companies such as Invisible are particularly beneficial for all of these types of marketplaces because of the scale at which we can complete complex data ops processes, manage customer outreach, track reporting and improve key industry metrics.

Delivery & logistics services

Delivery & logistics services were always an essential aspect of our societal infrastructures. However, they became a lifeline to the majority of people during the pandemic when lockdowns and store closures were in effect. 

However, the increased demands combined with the introduction of safety and social distancing protocols have only added to the day-to-day challenges that many delivery companies face. 

Outsourcing some of the more bloated aspects of logistics operations can relieve much of the associated burdens for these firms. The biggest areas Invisible helps with are leveraging our client’s data science teams to perform quality checks, standardize menus and services, monitor vendors and more. We can also help power sales, update customer records and update customer records.

Tech Companies

One of the biggest issues the pandemic has exposed is the need for updated tech infrastructure and innovations to help us deal with unexpected challenges imposed by lockdowns, remote working, healthcare and other key services.

Almost every business relies on technology and the variety of technical applications is almost infinite.

The good news is there has been an ongoing growth in tech companies and startups that have sprung up to fill the void. The bad news is, the sheer volume of data needed to scale customer acquisition, manage outreach and execute output without increasing costs is insurmountable for SMEs and distracts teams in bigger companies. 

In this case, outsourcing is the next logical step in clearing up the backlogs and focusing on more strategic wins. Data transformation, workflow management and lead gen are just 3 out of many services that Invisible provides to tech companies during these difficult times.

Summary: Making The Most of a Crisis

This article presents just a small snapshot of the possibilities that exist with outsourcing. At its most basic level, outsourcing saves businesses time and money. According to Deloitte, 59% of businesses use outsourcing to reduce their expenses, while 78% of respondents said they felt positive about their outsourcing relationship with other companies.

Even during the 2008 recession, only 9% of businesses decided to stop their outsourcing efforts, according to a separate survey by Brandon Gaille. This is in part due to the undeniable advantages that it gives to both large and small businesses.

Indeed, given the challenges that this 'new normal' has posed for businesses, there has never been a more important time to find ways to relieve the operational burdens that have continued to build up during the crisis. For many companies, the ability to manage these difficult challenges will determine whether they sink or swim as a result. 

As we have seen, outsourcing has been proven to be beneficial on almost every key indicator including time, money, competitiveness and workforce management. From that perspective, it is not merely a luxury but a necessity that can drive growth and reduce costs on a scale that would be virtually impossible to achieve otherwise.


Janine Griffiths

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