Can a business successfully outsource?

It’s not a secret that large firms outsource some of their functions to third party companies in the US and abroad.  You often hear a foreign accent when you call customer service of any of your providers and you quickly find out that they are in the Philippines or India.  That’s the outsourcing of the call center function and we all wonder why large companies do that.  When large companies do this, the service quality  generally gets worse not better.  Yet,  why do they keep doing it??? The answer has a lot to do with reducing cost even at the expense of customer satisfaction, which I personally find it a crazy thing to do and a terrible business decision.

However, for large corporations there are functions for which it makes more sense to outsource such as order processing, web development, and bookkeeping just to name a few.  All these have one thing in common: they all are back end admin processing functions with little to no customer interaction.  And the reason is very simple: cultural differences.  I have been in the business of outsourcing for over a decade and I can tell of you of so many cases where this was underestimated with a disastrous ending.  A classic case of Rajib from India with a strong accent promising Laura from Kansas repeatedly he will solve the problem to then transfer her without warning.  Rajib was simply reassuring Laura but from an American standpoint, he set an expectation he didn’t deliver on.

For small and medium businesses, the recipe remains the same.  Outsourcing the back end processes is the way to go.  And it makes sense because this is generally the kind of work that here in the US can be done for $15 to $20 an hour but in Venezuela for instance, it can be done for $6.  That’s a savings of 64% in average, not bad if you can make it work.  But it doesn’t end there, you can make sure you get someone with a degree from an accredited university and a few years of relevant experience and you will have a worker with a lot of potential growth and unmatched loyalty.  You will be paying them more than the best job around in their city would, so they will try at all cost to be proficient at their jobs.  But what about the cultural differences? Since they are back end processes the impact of those is greatly minimized although they remain there.  Great outsourcing firms will always have cultural training.  We have a successful program for all of our international staff and we find it to make a significant difference but it is not perfect.

Lots of small and medium businesses feel like they don’t have the resources to take on an outsourcing effort but that is a myth.  There are full service companies like ours which will enable companies to start with one or a handful of employees at a time.  These companies will conduct the interviews to identify the requirements and will go on a search and find the candidate as part of their service.  The great part of the service is that there are no commitments, so you can start a person and if you realize you don’t like the performance you can change the person or go back to hiring locally.  In the case of wanting to outsource an entire department, it is useful to keep the leads in the US to minimize cultural issues.  We call that model a hybrid and we provide those services as well.


About the author
Emerich Esqueda has been working in outsourcing for the last 13 years with staff from all over Latin America.  He is the founder and owner of Highland Force Staffing in Houston, Texas




1 thought on “Can a business successfully outsource?”

  1. Really interesting approach you present, Emerich! I I strongly agree on the back end admin processing functions to be the ones outsourced, hence, no impact on customer interactions.

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