Although agility is widely valued in the business world, many businesses get side-tracked before they have a chance to fully achieve this operational goal. Non-core tasks have a way of tying up company resources unnecessarily, with the resulting bottlenecks blocking momentum toward structural change.
Yet a range of solutions is available, with four major organisational tactics able to help businesses streamline their operations. These measures lighten the administrative load on management, removing key bottlenecks to make agile business models possible. Known as Shared Services Centres, Assisted Captive, Virtual Captive, and Full Outsourcing, they work by leveraging economies of scale to decrease the burden imposed by more traditional business models.
Unique challenges, tailored solutions
Depending on circumstances, companies may require some degree of assistance with services set up in-house, or a fully outsourced support programme, or something in between. Finding the right spot on that spectrum is an important task for a business looking to streamline its operations. The main types of arrangements fall into the following categories:
Shared Services Centre – This option uses in-house resources to manage support activities for multiple internal customers. For some companies with considerable resources already at hand, SSCs offer full access to the many benefits of consolidated (or mutualised) operations. However, as compared to an outsourcing model, the task of setting up the company’s own shared service centre involves a substantially higher level of investment in the first year – as well as a higher level of risk, even with the help of external consulting expertise. Many companies find that the time and resources needed to independently set up, operate, and oversee an SSC could be spent more productively if external assistance were brought in to facilitate progress in this area, so that benefits could be reaped earlier and more safely.
Assisted Captive – This option invites an outsourcing partner to help build and then run for a period of time a service centre at the client’s location, while also handling initial recruitment needs. As an early-stage option, Assisted Captive makes selective use of the outsourcing model, letting an external partner help build the SSC and perhaps recommend the ideal technology to license, while bringing operational management excellence by seconding experts for a limited period of time. Once the Assisted Captive is up and running, the company can transition its internal resources to running the operation.
Virtual Captive – This option lets the outsourcing partner handle the bulk of the company’s support functions. Tasks are performed at the outsourcing partner’s selected location, in a working environment exclusively dedicated to that client, thus forming an extension of the client’s own operations. Under this arrangement, the external partner often operates the client’s existing systems, although it may provide its own systems and processes to deliver portions of the service, if so desired. By directly operating an optimised configuration for the exclusive benefit of that client, the outsourcing partner provides significant improvements in value and efficiency, while letting the business focus on its core operations and enjoying the softer benefits of a cosy working relationship with a dedicated set of individuals on the provider’s side.
Full Outsourcing – This complete outsourcing model allows businesses to focus almost entirely on their core operations, letting a selected partner use its full technological prowess and business expertise to manage support functions. The resulting setup is tailored to the client’s own needs, particularly as the outsourcing partner can provide additional guidance through analytics and predictive modelling. Many companies begin with one of the more conservative arrangements, and then gradually mature towards the BPO model to take full advantage of the added efficiency, simplicity and saving on investment that it delivers.
The agile mindset
The task for businesses is to make a tactical decision from the alternatives outlined above, which can then fit within their overall strategic aims.
Whichever of the above alternatives is pursued, the transition to agility still requires additional steps. To successfully embrace an agile business model, companies must undergo other internal upgrades as well as a significant cultural shift. Shared Service Centres, the Assisted Captive and Virtual Captive models, and the Full Outsourcing option can open the door to agility, but each business must then walk through it.
When less time and effort is spent on non-core tasks, more can be directed toward enhancing the key aspects of the company. By accelerating the innovation process, agility lets companies do far more than they had originally envisioned – reaching new heights for themselves and for their industry.