Strange News: City considers outsourcing its police work the the County's Sheriff's Department

It is some of the more strange outsourcing news I came across. The city of Ridgecrest , NC is seriously debating if they should give up their police department and outsource its duties to the local county. The Sheriffs would then take up the responsibility of policing the streets of the city.

Of course...there is significant opposition to the idea by some of the members of the city council. No self respecting city would like to give up  its police force and the status which comes with it. Even more problematic, some high paying jobs would have to be eliminated.

But in all seriousness, the larger point is that the pressure on local budgets is what is forcing the issue here. It is of course an unconventional approach...but the city deserves credit for seriously considering the issue.

Coming from the city of Chicago myself, (a city which is either  headed for bankruptcy  or draconian cuts combined with tax hikes) I have to express admiration for any local government which seriously considers outsourcing as a viable tool to reduce costs.

Corporate America has long embraced outsourcing as the go to solution to reduce expenses while maintaining/improving  service levels. If government were to become serious about managing its resources in a similar manner the strange news from Ridgecrest  might become much more common.

And this would actually be good news for once.

Article can be found here: City Considers Outsourcing Its Police Department 

6 Steps How To Make Outsourcing Work For You And Your Company

Outsourcing might not be for everyone...but it certainly is a viable  solution to a lot of the problems companies face. Bigger corporations have embraced outsourcing for a long time...but it the smaller and midsize company where it can really make a difference.

In today's age corporations have become fairly used to outsource certain non mission critical tasks associated with running a business. There is hardly a corporation left which still processes  their own payroll or computes their own tax returns.

Yet, despite the widespread adoption of outsourcing those non critical tasks  the willingness to outsource more  mission critical tasks is often times not there. This is not necessarily a good thing.

There is ample evidence that smaller or midsize companies which have embraced a coherent outsourcing strategy are significantly more successful in the marketplace than companies who do not engage in any BPO or KPO strategy.

When reviewing how companies succeed in their outsourcing strategy it becomes obvious that there a are certain key steps or traits  these companies share.

Only outsource those  business processes which are not central to your business. Stick to secondary processes. In simple terms...when you are an engineering not outsource engineering. Outsource website design and maintenance, customer outreach, marketing, acquisition and so on,,,

Pick The Right Partner and Do Your Research
Try to find the right partner seems rather logical..yet it often times where the effort falls flat. Try to find a provider who has experience related to your industry, Get references and if possible..find a company with a presence in your time zone. It will make things easier over the long run.

Work Closely With Your Provider
This is perhaps the most important piece of advice. The more closely you interact with your provider, in particular in the beginning, the better your new partner will understand what you are trying to accomplish. The learning curve will be shorter and consequently your efforts will pay off quicker. There is a multiplier effect applicable to a successful outsourcing put in an extra 20 hours training your outsourcing staff in the will save an additional 60 hours later on.

Set Up Verifiable Key Performance Indicators (KPIs)
Seems simple but it will make sure that your outsourcing provider stays on track and mission. (and you too)  Allocate number of hours towards a process and define the expected results. By having hard KPI's you  share with the provider everyone in the chain becomes accountable.

Own The relationship, Manage It Properly
It is a hard truth that when an outsourcing relationship goes off the rail it is usually because no one really owned  the relationship. Companies often times fail to identify a key person responsible for the success of the relationship. Consequently there is no one who works daily to make it better and helps it to succeed. Do not treat it as a secondary (second class) channel within your organization. Give it a real status.

Innovate and Improve
True efficiency gain is never just one step. Efficiency gains are most often realized  by implementing incremental improvements which collectively make it better. Try to look at your outsourcing relationship on a regular basis aiming to identify operational weaknesses. Improve upon those deficiencies bit by bit. Over time this will lead to significant improvements in your KPI's...making the outsourcing relationship a success.

Final Words:
Business Process Outsourcing (BPO) can turbo charge your operation when done right. It will give a corporation more flexibility and convert capex dollars into opex spent. Additionally the organization gains knowledge and expertise outside its core business which will make it more successful overall.

Perhaps most importantly...overall costs will decrease, raising shareholder value and making the business more valuable to its owners.

Is The Outsourcing Industry Shrinking ?...Yes and is why

There has been some talk throughout 2016 that the outsourcing industry is shrinking. The latest news is a newly published report form IDC (Global Analysis firm) which took a look at the revenue for the APAC markets (ex Japan)  in 2015.

The report makes clear that there is some truth to the notion that the outsourcing market gets a bit more competitive. Total revenues declined by a rather whopping 3.7 % YOY for the traditional outsourcers. A decline of 3.7 % is rather substantial for an industry which had gotten used to continuous growth in revenues.

In another interesting tidbit the report makes clear that the contraction is not just limited to the medium and smaller level providers. Among the Top 10 outsourcing providers revenues declines by about - 1.8 %...better than the overall segment...but never the less a noticeable decline.

The industry is getting hit from a few sides. The cloud and a general trend towards more automation is putting the brakes on the available workload. It has always been argued that the cloud will make corporations more efficient..and it seems that this efficiency gain (meaning less people needed) has finally arrived at the providers of BPO/KPO services as well.

If there is one thing for certain it is that this trend will continue. Consequently one can  expect some form of consolidation among industry players to set in .The days of rapid growth might be over.

Not all is lost though.  IDC also reports that relative newcomers to the outsourcing market (China and other Southeast Asian countries) are getting bigger share of the pie. As a matter of fact, IDC is expecting compound growth for the industry as a whole of 6.9 % throughout 2020.

As such the report makes clear that it still is all about costs when it comes to outsourcing. Relative newcomers to the market with lower price tags are gaining ground at the expense of the established players.