For over a decade American corporations have been outsourcing work to foreign countries and faced fiercely vocal opposition to the practice. The fact that outsourcing is a time-honored practice in the business world is irrelevant to critics. What matters is that the jobs are increasingly going to foreign countries, instead of American workers. With this much negative attention being paid to the issue, it’s a wonder that any company would continue to outsource services. They do so because the issue of outsourcing is much more complicated than simply moving jobs overseas.
Business process outsourcing (BPO) is one of the fastest growing areas of outsourcing. BPO involves handing over the mundane and labor-intensive business processes that can quickly overwhelm a large business. This includes things like accounting, billing, and customer service as well as human resources and legal services. Very few companies are built with the mission of having a great billing department. By streamlining and outsourcing these processes, they are able to put more time, energy and money to the reason they are in business: the products or services that are at the heart of their company. This focus allows them to improve their core business as well as expand into new products and service lines to meet the growing needs of their customers. This focus would not be possible without outsourcing.
A related benefit of outsourcing is an actual improvement in service. If Corporation X is known for creating the highest quality blue widgets in the world, they are going to do a pretty bad job at customer service and billing. However, outsource firms are experts at customer service and billing. They have spent years developing and improving the systems and procedures needed to make those processes as efficient and consumer-friendly as possible. A great many companies who turn over these types of services, along with communications and IT services, find that customer satisfaction actually increases after the initial transition period.
The main argument against outsourcing is the loss of jobs and income from American workers and states. Yes, there are some outsource companies operate within the US, so that when a company outsources the jobs are only moving from New York to Montana. Choosing to outsource within the US is a way to counter the argument. Another choice more and more businesses are making is to hire an outsource company that is based in the US. While they may have offices and workers in other countries, the profits of the company remain stateside. Many of these US-based companies are quite active in their local communities beyond paying taxes and reinvesting profits in expansion and growth. Just check out the press releases or twitter streams of these companies (for example, @Marlabs ) to see the money and manhours they donate to local charities.
It is no wonder that managers and executives continue to see outsourcing, local or overseas, as a valuable resource. It improves their bottom line and improves their customer experience. If they choose a US-based and US-operated firm, there really isn’t a downside at all.
photo courtesy of www.seniorliving.org.
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