SMBs and Outsourcing...

There is a general perception among small & medium business owners that third-party outsourcing of business functions such as HR is essential for only large corporate. However, time and again it has been proven that streamlining business operations and cost-control strategies in the form of outsourcing is restricted not just to the large companies but also the SME’s.

Comprehensive Solutions for Every Client 

HR Process Management

 The evolution of outsourcing in destinations such as India, Vietnam and Philippines etc. and the development of high-quality service providers like Mynd Solutions have however driven a change. This change in the thought processes of Small/Medium business owners are driving more outsourcing operations and is primarily attributable to the below reasons:

    Local Payroll-related ccompliance and taxation: Small businesses normally find challenges in this area of business, owing to its strong financial and legal implications. Employee benefits compliance and taxation related laws are the specific areas that require immediate attention and any laxness on the part of the company can lead to major financial losses as well as harm the public reputation of the company. HR outsourcing can be very beneficial in this regard and help to avoid this tricky situation.

    High-end technology access at a relatively affordable price: Small and medium enterprises and/or newly formed companies normally have limited resources for spending on technology and infrastructure etc. In case the backend services are outsourced, the need for companies to own sophisticated and latest technology tools/ skilled manpower are actually eliminated. Hence, the Capex and Opex are decreased for the company.

    A comprehensive solution: SMBs can avail the benefits of a comprehensive HR solution by sub-contracting their entire HR function to a trusted third party vendor. Payroll, Statutory Compliance, Employee Lifecycle management can all be handled under the same service umbrella by the service provider.

Considerations and Guidelines While Outsourcing Services..

Of an on, we have been highlighting the varied advantages and service specifications of different domains of HR and Finance & Accounting Outsourcing. However, today we would like to take an opportunity to present some Considerations that must be assumed before arriving at the decision to Outsource:

·         Examining the corporate culture- Assessing the level of readiness in the organization with respect to transferring some control/confidential information to a third party vendor in order to enhance business motives.

·         Evaluate current processes in different business verticals that are under planning to be outsourced. Companies must determine the efficiency of their processes and also whether they could be managed in a better manner by an external service provider.

·         Performance measurements- ensure adequate determining metrics are in place to assess the vendor's performance and check whether there are any workflow and process improvements or not.

Sometimes, the staff of a company such as the HR or Finance & Accounting team might be reluctant to adopt outsourcing due to fear that their role within the company will get side-lined. However, the very opposite of the same is most likely to be true. There is indeed a change in responsibilities due to the outsource partnership, but it is definitely for the positive.

The positive changes include development of the talent pool of the company teams’ to add skills such as vendor management, vendor performance management, leadership and team management. Additionally, outsourcing would enable your current HR and/or Finance & Accounting staff emphasize on the advancement of their strategic efforts rather than focussing on fulfilment of core administrative objectives. Industry statistics suggest that the outsourcing advantages offset a few of the challenges that may arise, such as a cultural shift.

Moving ahead on the decision to outsource, there are a Few Guidelines that must be followed in order to contract out your organization’s services in a secure manner. Enclosing them below-

Shortlisting the Appropriate Outsourcing Services Provider:

Selection of the right company is among the most critical steps to be followed while outsourcing. The selected vendor must have a stringent security policy. Organizations should cross check if the prospective outsourcing provider has adequate security policies for data protection, privacy and against any vulnerabilities/ threats that may arise from the same.

Well documented and complied Security Policy:

A proper security policy detailing standards and procedures applicable must be in place. The policy should have the capability to maintain the confidentiality of vital client data and must also be regularly validated by a third-party security assessment company. The privacy policies must also be clearly defined and outlined.

Data Protection Policies

Companies should select vendors that employ VTA (Vulnerability Threat Assessment) and ensure the absolute protection and privacy of their client data. Taking the above security considerations in mind will facilitate any company in selecting a reliable, secure and efficient Outsourcing vendor to execute their processes.

The Dominance of India as a Globally Preferred Outsourcing Destination...

        India: “The Preferred Outsourcing Destination”

India remains the most preferred Outsourcing Country and contributes to 65% of the BPO off shoring market. NASSCOM (The National Association of Software & Service Companies) has conducted several surveys in recent past in the outsourcing industry. Many positive outcomes have been reported as part of this survey, especially for the companies engaged in the outsourcing industry. Majority of American and European companies have selected India as a preferred destination to outsource their work, while nearly 50% Fortune 500 companies choose to outsource IT related processes to Indian outsourcing firms.

Despite the recent emergence of other contending lower-cost outsourcing destinations such as the Philippines, Mexico and China etc.; the Indian subcontinent has retained its leadership position as a prime provider of “Affordable yet superior quality” outsourcing services. The Indian outsourcing industry is witnessing a rapid growth rate of nearly 30% per annum. This growth is primarily attributable to a skilled and knowledgeable young workforce, rapid infrastructure growth and some beneficial economic and government policies.  

The Cost Benefit Factor

India gains heavily on the point of labor costs as compared to the developed countries where the wages for skilled personnel are relatively much higher. The low labor cost factor helps companies achieve substantial savings on their expenses. Due to this sort of flexibility available in terms of labor wages, companies are empowered with the ability to enhance their profitability.

The Best Talent Pool of the World- Both in Quantitative and Qualitative Terms…

India is a young nation, with more than 80% of the population under the age of 30 years. This young population is progressively enhancing their education levels and hence contributes to the development of the largest Global pool of Skilled Human Resources. Another fact that contributes to the dominance of the country in the International Outsourcing Market is the fact that India is the world’s Largest English speaking country. Hence, India secures and seals its leadership position with the Human Resources playing a prime role in the same.

World-Class Services- Local Prices

At the advent of the outsourcing century since the year 2000 onwards, MNC’s had chosen India to outsource their requirement, keeping in mind the resultant cost benefits.  However, later on it was noticed that companies extended their outsourcing contracts and continued with their Indian providers due to continually good service delivery levels. Quality of services offered and time-to-market drove global customers to continue with Indian Outsourcing Companies

Government Stability and Favorable Policies

Government supports the outsourcing industry in India through several helpful policies on power, telecom, taxation, special zones and industrial parks are improving both communication and infrastructure systems. The IT industry is being supported continually by the Information Technology Act IT which also leading to a growth in the outsourcing industry.

Rapid time-to-market of Indian Companies

India, being in a different time zone ahead of most Western world countries gains by this time difference and offers the most rapid time-to-market. The time difference allows early completion of work, timely fulfillment of deadlines and hence quick turnaround. The above mentioned factors lead to satisfied customers.

India boasts of the best in Infrastructure and technological capabilities

Urban India has well developed infrastructure in terms of cellular networks, telecom and Internet in all major towns and cities. Customers are offered leading edge technology, tailor made solutions for all applications and business functions including Business Process Management, Finance & Accounts, and HR Outsourcing etc.