FRISTA Guide to Outsourcing · Perhaps understandably, mid-market businesses have not been so quick to follow. The set-up costs for establishing an SSC can be prohibitive for mid-size

A GUIDE TO FIND THERIGHT OUTSOURCINGPARTNERKey factors that should help businessestake the first successful steps on theirnearshoring journey.

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HOW TO OBTAINBENEF ITS OFHAVING SSC, WITHL IMITED R ISK ANDL IMITEDINVESTMENT . CANOUTSOURCING BEAN ANSWER?

The guide to successful nearshoring:

The period of transformational changethrough which many businesses are currentlygoing is unprecedented; globalisation plusBrexit and other protectionist behaviours areproving to be an unwelcome stimulus tofinancial volatility, and acceleratingadvancements in technology together withthe changing needs of the ever-demandingconsumer are all converging to create aperfect storm for businesses globally. As a consequence, organisations are havingto transform themselves in order to stayvisible, remain relevant and, of course,continue to be competitive. This in turn isputting increasing strain on margins wherethere is already pressure to grow profitability. Over the last years large organisations havecircumvented these problems by establishingtheir own shared service centres (SSCs) inorder to consolidate functions and cut costs,or by outsourcing high-volume, standardisedprocesses altogether in order to de-risk, freeup capital and focus on their strategic coreactivities.

Perhaps understandably, mid-marketbusinesses have not been so quick to follow.The set-up costs for establishing an SSC canbe prohibitive for mid-size organisations. Inaddition, such businesses are often unable toconsolidate their HR or finance functions at ascale sufficiently needed to achieve thedesired benefits. In some cases, employeesbecome disillusioned which can also lead toattrition, exacerbating the problem. The outsourcing journey can appear just asdaunting, especially if you have littleexperience in strategic sourcing, or indeedhave never outsourced before. Choosing theright partner, deciding what processes tooutsource, being locked into a contract andentrusting your brand with a third party oftenextends beyond the risk appetite of a mid-market CFO or CEO. But what is the ideal solution? Of course, itdepends on the very specific needs of theclient but it is possible to optimize all three. Naturally, there are a number of determiningfactors when considering a nearshoringpartner; having a robust contract in place andwell-defined Service Level Agreements (SLAs)are essential, but we’ve also listed here anumber of additional key areas werecommend CFOs and CEOs consider beforechoosing a partner.

Nearshoring, when donecorrectly, can be the perfectbridge between establishing

your own SSC and all-outoutsourcing. If you choose

wisely, the right nearshoringpartner can also support youwith a range of solutions that

allows you to test & learn, thenscale appropriately depending

on the volume of processesyou want to improve, yourperceived timescales for

benefit realisation and yourgeneral appetite towards costs

and risk.

1. Choose a provider who is a practitioner. Look for a provider that has a depth of experience in setting up aShared Service Center, and not just an organisation who can take onyour processes. For example, Frista was itself a Shared Service Center so ourleadership team have genuine practitioner experience and inherentlyunderstand all the nuances involved in establishing an SSC. Thispractitioner experience is invaluable. However, the imperative persists and we’re seeing a growing appetiteamong more medium-size companies, particularly in WesternEurope, to improve efficiencies in their back office. These businessesnot only want to reduce costs and improve service, but also to freeup time and resources to allow them to focus on core activities ormore strategic initiatives. Such businesses are looking at a range ofsolutions; centralization of operations, automation of processes usingtechniques like robotic process automation (RPA) or optimization byoutsourcing.

2. It's about taking a partnership approach Choose a provider who has a strong partnership approach to doingbusiness. If this is your first experience in nearshoring you want apartner who is vested in the relationship.  How agile are they, are they approachable and accessible at alltimes, do they operate beyond the letter of the contract? Are theytransparent about their costs and pricing models? Do they sharerisks and reward? In our experience, willingly passing on a share ofthe benefits realised from automating a process goes a long way toestablishing trust with a client.

3. Can you test&learn without risk? Smaller and mid-size businesses want limited risk andso often don’t want to go all-in from the outset. Weallow our clients to test with just a few FTE to start with,and on a contract which can be stopped at any time,allowing them to build their confidence with no risk totheir operating models – or to their customers.

4. Think about the future Having highly skilled in-house practitioners on processoptimisation and management methodologies like LEAN,as well as the capability to even build their own robotsshows a partner that is highly vested in futureoperational capabilities and next practices.  

5. Choose an expert in product-platforms The same applies to any specialist platforms uponwhich your own processes are being administered. In our organisation we have experts in technologicalcompetencies like SAP, Magento, KOFAX, Service Nowand various RPA solutions.

6. Do they speak your customers'language? But if you have plans for strategic growth then this ismore likely to become a necessity anyway rather thansimply a ‘nice to have’, so it’s worth checking whatlanguage capability your partner provider has accessto.

| OAKRIDGE HOLDINGSAnd, the last two factors are:

7. Do they have highly qualified agile workforce? 

8. Efficient recruitment strategy It’s often said that in a crowded marketplace your people are your greatest brand asset, and so itgoes without saying that you want your nearshore provider to be an extension of that. But youalso need to trust that your provider can scale-up as quickly as your circumstances demand it –and attract the right talent too. In our experience, organisations that also invest heavily in their people are generally able tooutperform their competitors. This is because of a number of factors; • such organisations put a lot of effort into creating an environment that provides their peoplewith an opportunity to excel• they consistently achieve excellent employee engagement scores because they involve theirpeople in bringing to life the company vision, values and behaviours.• they pay careful attention to how they recruit. In our opinion, the last point is particularly differentiating. Very few businesses are equally asagile for their candidates and employees as they are with their clients; for example, weaccommodate the scope of responsibilities to the person instead of simply sticking to jobdescriptions. This way we are able to use a candidate’s potential to the maximum. Innovative and motivated people will always choose an employer that values continualimprovement over the status quo and employees who feel valued, get to make a significantimpact by having a wide range of responsibilities and who have direct contact with key decision-makers, generally stick around. So, if you are a mid-market business and you are looking to make process efficiencies, reducecosts or unlock the growth potential in your business by nearshoring, keep these 8 Tips close athand and use them to help you find a trustworthy, agile and compatible partner provider.