Confessions of a Corporate Shopaholic

What is outsourcing?  Many are familiar with the term, but few can cite specific examples in their space.  In fact, it is much closer at home than you think.  There is outsourcing in your office, your own business, and more often than not, your home.

Technically speaking, whenever you are paying for an external party to help you with a task, service or process that you would normally do by yourself, you are outsourcing.  Hiring someone on your payroll is not, since you are still owning the responsibility.  So when corporations are trying to concentrate more on their core business of making money, every one of them are outsourcing their support functions, or, non-core businesses, to external parties.

Some may claim that it’s the capitalist way of cutting jobs and pay.  Though I don’t support allowances of inefficiencies.  If we really have no clue how to design, build, manage and maintain the car park in our office building, what’s the point of painstakingly identifying and hiring experienced personnel, only to fire them after the facility is completed?  Instead of spending unnecessary amount of time researching for the right technology and systems, applying for the right permits, and running into hick-ups and delays of unknown waters, outsourcing the car park design, construction and management services to a professional firm in the industry proves to deliver much more precise results.  We are now outsourcing our non-core requirements or services, to a partner whose services are of their core business proposition.

The only so-called alarming trend nowadays is that more and more of our supposedly core corporate functions are being identified as non-core.  Corporations want to save costs, and they also want to protect their brand image.  Though it doesn’t really work these days as public opinion still goes after the cost bearing parties, corporations still find it better hiding behind the outsourced partner.  Certain obligations can be passed along, financially or legally.  For the last two decades or so, we are seeing payroll, real estate management, mailroom services, logistics, finance & accounting, IT, HR, legal, and of course, procurement, being outsourced.

The way I see this makes sense is that with external parties, we are harsh toward them.  We want accountability, crystal-clear processes and deliverables, and lower costs every year.  If they would have done it in-house, it may take considerably more time and efforts to pitch, convince, and motivate internal staff to “up their game”.  Plus, there is on average 30% additional HR benefits being invested on each employee on top of their salaries.  As long as a reliable partner can be identified, most senior corporate management think it’s just a no-brainer.

For employees, this is definitely a worrying trend.  None of our jobs are truly secure these days.  Thousands of professional firms are popping up every month around the world looking for services to take up for our employers.  Just knowing what our employers do as a business actually limits our career.  We now need to make sure we are truly functional specialists that are non-industry specific.  What about opportunities?  Yes, consider the option of moving into specialist firms or BPO (business processing outsourcing) firms.  Just google the area you are in and you will find tons of HR services firms, finance & accounting solutions, procurement services BPO centers, and so on.  The field really has changed, and so are the game rules.  Though the experience can be a lot more satisfying depending on the type of person you are.

Still wanting a comfy life with the security of a large corporation?  Make sure you are one of the best within your team, and target for the remaining few positions that are still needed to lead and manage your corresponding outsourced firms.  These positions are still critically needed within the headcount of corporations, because all of them will acknowledge that failing to sufficiently manage an external outsourced partner is always a ticket to disaster.