Why Outsource?
Many strategic leaders in the industry are recommending the outsourcing of business procedures. The information following has been compiled by our research team to give you some further insights into Business Process Outsourcing.
Financial savings is cited as one of the main reasons for outsourcing. According to the National Post, "Economies of scale are achieved when a specialized vendor concentrates on one area and provides this service to many corporations. Studies show two-plus years of outsourcing payroll can result in savings ranging from 10 to 20%." [1] In addition, when the task is limited and irregular amounts of time are needed, it is often less expensive to outsource a function like bookkeeping than it is to have a specialized staff member. Phil Reynolds, the National Leader of KPMG's Canadian Cost Optimization service, lists outsourcing of non-core activities as one of the 10 common areas of gain. [2]
Strategic focus is another strong motivator. According to a survey commissioned by Price Waterhouse Coopers, 100% of Canadian executives surveyed agree that Business Process Outsourcing allows their companies to concentrate their efforts on core competencies, and a large percentage of those found that payroll and accounting were excellent candidates for BPO. [3] Since no one organization can pursue excellence in all areas, outsourcing administrative functions allows a company to utilize its human resources in processes that add value to its goods or services. Studies show that companies that reduce their administrative tasks by half show an increase in strategic focus of 40%! [4]
Outsourcing can allow an organization to acquire specialized expertise in circumstances where it is not practical to have dedicated personnel. It also provides access to advanced technologies that might otherwise be out of reach. [5]
For more information, please feel free to browse some of the following material, or contact us to learn more.
1. National Post - Rationale for Outsourcing
2. KPMG - Reduce Costs Now to Remain Competitive with NAFTA Peers
3. Price Waterhouse Coopers - Outsourcing Comes of Age
4. EMERGENCE Canada Report
5. KPMG - Strategic Evolution
