The term outsourcing often has a negative connotation in the Hawaii business community. It is frequently frowned upon because of the perception that it get’s rid of local jobs and those who have tried it, have likely had a poor experience. Luckily, that is the outsourcing of the past. There is a new, fresh way to look at outsourcing and here are 3 ‘new’ ways for companies to look at outsourcing.
1. Outsourcing should not be looked at as replacing local jobs. The right way to look at it is as a mechanism to improve productivity in the business, thus creating the opportunities for more, higher paying local jobs.
None of our 40+ Hawaii clients have laid off workers. Instead, they have hired supplemental staff, often at 50% or more of what it would cost in Hawaii, to support their local staff and make them more effective. As stated above this naturally improves overall business productivity, but it also makes the staff happier as they now have more time to focus on important, revenue producing tasks, and worry less about the menial back-office work that was keeping them at the office an extra couple of hours. With all our clients, it is a win-win for everyone involved.
2. Outsourcing, in the traditional sense where companies outsource a service, is hard to get right. That is why Hawaii-scale companies shouldn’t outsource. They should try and create the value of an offshore subsidiary in what we call a co-sourcing model.
JP Morgan, AIG, and United Healthcare don’t outsource. They start their own subsidiaries in the Philippines and India. They manage their staff as part of their workforce, or in our case would think of as hanai ohana. This allows for complete control, visibility, and flexibility. Even at a large Hawaii business scale, it isn’t viable to start an offshore subsidiary.
Hawaii companies can create the same value of an offshore subsidiary in a co-sourcing partnership with a vendor that aligns with their organizational goals. Co-sourcing is the right way for Hawaii companies to approach any outsourcing engagement.
3. Outsourcing is not just ‘call center’ or ‘virtual assistance’, it can be whatever you need in your business. There are over 11 million people in the Philippines and a lot of them can do much more than call center and virtual assistance. Some of the opportunities our clients have taken advantage of are in accounting, customer service, HR, analysis and reporting, IT support (development, help desk, inventory management), graphic design, medical billing, virtual nursing, and much more. The best way to think about it is, if someone can perform a task in a work from home environment in Hawaii, they can perform that task in the Philippines. Outsourcing a single function or task Is a thing of the past. The new way is creating cross functional, self-propagating teams that can create a positive step change in your business.
The new way to outsource, co-sourcing, is an excellent way for Hawaii based companies to improve productivity and overcome the current talent shortage. The largest companies in the world are using this approach to get ahead in today’s business environment, and Hawaii should not be left behind. If you want to learn more about co-sourcing or outsourcing in Hawaii please visit www.connext.solutions or send a note to taylor@connextglobal.com.
