Years from now, when the business world looks back on 2020-21, the lessons from this moment will be clear. Companies that maintained rigid structures and traditional business plans have generally been unable to make it through the pandemic intact, while those able to find creative solutions to today’s challenges have thrived.
For a variety of business types, the quickest path toward flexibility can be found through capable outsourcing partners. Below we will examine three distinct categories of business, and how outsourcing can facilitate the type of growth and stability they need to succeed in the current economic climate.
One size fits all
Scale-ups are high-growth businesses or joint ventures that delay the creation of in-country finance or tax functions until they have established their operations and have proven their potential for success within a given country or region. This category also includes agile companies that aim to disrupt their industry.
Scale-ups move far too quickly to have any success setting up their own internal administrative departments covering each of their locations, and alternatives such as Shared Service Centres (SSCs) are not designed to deliver effective on-the-ground service where it is needed most.
Only a dedicated team of specialists can handle their back-end needs without pulling resources away from their ongoing projects. To coordinate complex systems across borders at a fast pace, an outsource partner with an established presence at multiple locations will be needed.
Carve-outs are components of a larger parent company that has established business operations in several countries. Often, the finance and other support functions of these carve-outs cannot be maintained by the parent company after a pre-set cut-off date.
Carve-outs of this type need an interim, but instant and world-class solution for their support functions. They will also benefit from a complete suite of business apps, such as the kind an advanced outsourcing partner can offer.
Small-subs refer to subsidiaries of existing organisations, with relatively low individual materiality. They are often situated in ‘difficult’ countries, and possibly left outside of mainstream corporate systems. Nevertheless, they still require a level of support unavailable locally.
This category also includes companies with numerous small operating sites, each of which requires a world-class support function. Hotel chains fit this description, as do networks of hospitals, private schools, supermarkets, automobile service centres, and more.
For a variety of reasons – complex local rules, stifling bureaucracy, endemic petty corruption, opaque regulations, and – a regional outsource partner represents an ideal solution for small-subs that cannot afford to make mistakes in a difficult market.
The ripple effect
The ability to delegate essential but non-core activities to a trusted partner has added benefits for all kinds of businesses. Outsourcing also frees up resources at the middle and top levels of a company, which can focus instead on pressing needs that relate to core business functions.
In addition, an effective outsourcing partner can provide improved service over in-house solutions. Tools such as Robotic Process Automation (RPA) and AI-driven data analytics allow the outsource provider to deliver additional business insight to their clients, which can enhance efficiency and potentially influence overall business strategy.
In the current economic climate, these types of advantages are likely to play an outsized role in the fortunes of any given company. By enabling a more agile operational structure for scale-ups, carve-outs, and small-subs alike, this ripple effect could indeed make the difference between drowning in stormy seas, and riding a wave to success.