We’ve had the privilege of working with some of the planet’s most talked-about and fastest-growing companies, supporting them since they were a twinkle in their founder’s eye! We’ve put together an essential guide designed to help scale-ups and start-ups decide when to outsource.
Knowing when to outsource is critical for your business. It gives founders a golden opportunity to gain a major advantage over competitors by securing high-quality services at a lower operational cost. Here are the top five signs’ founders should look for to determine when it’s the right time to outsource.
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When Internal Processes Can’t Keep up with Growth
Growth brings considerable operational challenges, demanding swift action and strategic decisions. Managing a surge in customer demand or user uptake while recruiting the right talent poses significant challenges.
Growth. Yeah! Finally!
If only it were all upside…
While many Unicorns don’t advertise it, one of the key factors in their success was aligning quickly with a BPO. That BPO will build their customer experience systems and scale them globally at speed. Without this move, it is arguable that many would have lost the trust of their users.
You know when internal processes can’t keep up with growth when:
- Customer Support is overwhelmed, inefficient ticket management, staff leaving, and reviews deteriorating
- Seasonal Demands are stretching the company to breaking point. Forecasting, recruiting, training, and offboarding teams is taking up huge energy
- Payment and Procurement Processing is full of delays or failures in processing payments and payment errors.
- Talent Acquisition and Management is seeing difficulties in attracting and retaining skilled employees, managing team dynamics, and ensuring efficient communication
- Operational Efficiency can’t maintain efficient and streamlined operations. Processes become inefficient and ignored, producing bottlenecks. A lack of optimized workflows is hindering productivity and growth potential.
- Regulatory Compliance is becoming an urgent issue. Navigating complex legal frameworks and ensuring adherence to industry regulations can be a significant challenge for scaling startups.
When the Business is Customer Experience and the Customer Experience is Not Cutting it
Customers are the lifeblood of business. While there are a few companies that seem to pull off growth while delivering truly appalling customer services – banks, mobile phone companies, and airlines spring to mind. The rest of us don’t have their monopoly, balance sheet, and brand recognition.
Most start-ups will see their customers fall away without a serious commitment to Customer support. McKinsey analysis shows that companies that deliver leadership in CX achieved more than double the revenue growth of “CX laggards” between 2016 and 2021.
“We are a very demanding client and one of our core values is delivering seven-star services for our clients,” explains Claudia Moras, director of vendor development at TravelPerk. “So, with Enshored [BPO], it was a bit of a ride at the beginning because we scaled very rapidly. They are now our best-performing partner in the network. I’m pretty confident they could work with a thousand people.
“In the past six months, we’ve grown rapidly and I’ve not had to think about the part of the business that Enshored handles because they have done everything we’ve asked of them. It’s just peace of mind. Having a solid partnership that we can forget about because we know it works allows us to focus on other priorities.”
When the Business is Reliant on Back Office and Back Office is Not Cutting it
When the systems required for growth cause backlogs, it threatens growth. Some of these can be simple – the food delivery apps outsourced restaurant onboarding to BPOs. It’s a simple job involving millions of take-out stores, BUT the app is redundant without it.
Big Law found that legal process management was slowing them down. Whether it is IP protection reviews, data organization, or the technically exacting process of document preparation, they have partnered with BPOs to accelerate growth. Look at the law firms that spend the most on advertising. There is a high chance they are partnering with BPOs to manage large volumes of the workstream. Leaving the true legal work to the high-value lawyers.
‘Back office’ is a benign word for what can be a considerable percentage of a start-up’s activity. It’s often hard to know where to start when evaluating the viability of outsourcing. The key is to engage with a thoughtful BPO who can help break down the functions and triage the activities that make the most sense
When Operational Issues are Beginning to Hamper Innovation and Product Development
All businesses need great ideas, and innovation makes them stand out from the rest. Increasing market share and growing without a competitive advantage is hard.
A frequent problem for start-up founders is spending time on non-core functions. It means they are spread too thin and unable to concentrate on what they do best: coming up with great ideas to help their business compete.
Additionally, the best and brightest people in the business are wasting their time doing routine work – the CMO building lists for campaigns, the CTO defining license renewal dates, and half of the finance team dealing with customer issues about billing. Valuable hours are lost, time that could be spent developing new ideas, innovating, and improving the product or service. And if you’re too bogged down in the minutiae of everyday problems, you cannot plan for the future.
With more free time to work on more significant ideas and partnerships, you can break free of the shackles holding you back.
When Key Employees are Performing Multiple Roles
Successful businesses are focused: They have clear objectives and priorities. They know how their work moves the dial. They stay on track – and there’s no mission creep.
All businesses depend on motivated, engaged, and productive teams. The challenge can become more difficult when employees handle multiple responsibilities outside their normal duties.
This expansion of their roles, often due to increased growth, means many face a juggling act. The result is that staff stray from their purpose, resources get stretched, and people often do multiple things badly rather than focusing on their primary role.
For start-ups experiencing rapid growth, this can often present itself as a perfect storm in the “move-fast-and-break-things’ nature of a fast growth environment. When too many plates are being juggled, something is bound to come crashing down.
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