In this final installment of our guest interview series, we spoke to John Riordan, a Non-Executive Director at Otonomee, one of the world’s first purpose-built, remote-first, outsourcing companies (BPO). In this blog, Riordan discusses the growth of outsourcing as an increasingly attractive option for growing and scaling businesses.
What are the Pros and Cons of Outsourcing?
There are four key areas to look at in terms of the pros of outsourcing.
1 - The first and most obvious one is cost, i.e. saving resources. The sage advice here is to do it for all of the other reasons first and then calculate how much you're saving afterward. It's always going to be a lower-cost option. But don't do it just for the cost. Do it for all of the right reasons.
2 - The second area that I'd focus on would be the expansion of coverage. Outsourcing allows you to expand many aspects of coverage. You've got the time of day, you've got different markets, different geographies, different languages, and also, you should never underestimate what it provides your existing internal team in terms of a more consistent and family-friendly schedule, which will drive greater staff retention rates.
Expanding coverage can have a significant knock-on internally in terms of a positive reaction amongst current employees.
3 - The third thing would be, it forces you to take a critical look at your current management skill set and workload. Done correctly, outsourcing can ease management challenges, and can allow that internal team to focus on driving product growth. This is a key aspect, because for many companies, customer support is a secondary or even a tertiary issue, and by outsourcing customer support to an external partner, you're allowing yourself to drive deeper internal focus on the main thing, which is your core product. Do you want to have a poor product offering and incredibly good customer support? Probably not. You’d be better off having a phenomenal product and being able to go to market to get a strong outsource partner to manage support.
4 - The final main advantage is that it can improve the overall performance. A lot of organizations tend to have a challenge with the customer satisfaction ceiling, not being able to move customer satisfaction beyond a certain point.
Moving to a really strong and well-aligned experienced outsourcer can be a way for some companies to break through that ceiling by embracing the best of the learnings that an outsourcer will have gained from other clients, so improving the performance by tapping into extra levels of experience that the outsourcer may have.
There are also a couple of other factors at play.
Most premium outsourcers will want to show you how quickly and effectively they can flex so that you will trust them to be your growth partner. That's a significant advantage.
And finally of course, there is risk mitigation. Having more than one site or one region spreads the risk of things like bad weather, telecom outages, or power outages negatively impacting the business. They can add to the risk register, so having that spread gives you that risk mitigation which can be very valuable in certain contexts.
What are some of the areas to be aware of as you consider outsourcing?
1 - The first one is quality control. You've got to make sure that quality is held as the most important measure from the outset of any outsourcing contract. Internal pressures may well be focused on costs, but achieving that higher level of quality from the outset will set a company up for a long-term positive relationship. So get the quality control right directly from the start.
2 - The second one is from a security risk perspective, this has got to be taken extremely seriously as one mistake here can torpedo a partnership. Bringing your finance colleagues, risk colleagues, and members of the audit function along from the start of the journey, is a critical thing to watch out for.
3 - The third one would be communication with other departments, making sure other departments in the organization that you're dealing with are on board with your thought process and that you're addressing their concerns. You're also acting as their representative when you're talking to an outsourcing partner.
4 - And then the final thing to watch out for, and this happens in every single first-time outsourcing, particularly with offshore, is collaboration challenges. There'll always be bumps in the road, so be prepared and make sure you talk with industry colleagues who have outsourced to offshore partners in that particular region or to that particular sector because they will share their learnings. And you know some of your best allies can actually be your competitors who will share those learnings with you.
What tips do you have for someone outsourcing for the first time?
1 - There will always be naysayers in your organization, and what you need to do is create a vision of the future and talk about stepping forward into the future, rather than falling back on the past. One of the best ways to step forward into the future is with a partner who is doing it for plenty of other companies as well.
You can actually fast forward that step into the future by using a partner.
2 - The next one is timing.
If you're seriously looking at outsourcing but have not taken any action, then you're probably late to the party.
I've seen so many organizations being laggards in terms of outsourcing. There's an element of bravery here, and an element of getting the timing right. If you are still thinking about outsourcing six or nine months later, you may well have missed the first wave. Don't miss the second.
3 - If you have an opportunity to avail yourself of the latest and greatest technology that a partner may be using with other clients, grab it. You will be exposed to many really great examples of best in class. You should partner with someone who is actually at the vanguard with other companies, for example how AI can complement support efforts.
4 - The final one relates to learning. Outsourced partners tend to be really strong at documenting processes and capturing successes. That is their bread and butter, and that then leads to accelerated learning and a better sharing of processes, and you can bring that documentation back into your organization, where it becomes a really strong knowledge base. Don't ever underestimate the power of having somebody else document your procedures. It may well be ingrained in a lot of your people. Actually having somebody external documenting it can actually enhance what you're doing and also create a roadmap for you for the future.
What are some of the trigger points that can act as a catalyst to outsourcing for the first time?
I would encourage people to empower mid-level and senior-level managers to actually go out and see what best-in-class is out there, so that you're actually getting ahead of the time curve, rather than behind it.
If the decision to outsource is being directed from above and it's a command down, it probably means you're late to the party, which then is going to mean that you've got to move even faster. The companies I've seen that have been the most successful when it comes to effective outsourcing are the ones who decide relatively early on and have taken some element of risk. They are the ones who reap some of the strongest rewards.
What are some key criteria to consider when evaluating different outsourcing partners?
The best way to do this is in terms of questions that you ask yourself.
1/ Is this outsourcing partner a good cultural fit for our organization? It comes down to alignment.
2/ Does this company have a management team that we can work with and learn from?
3/ Do we think this team has the ability, the willingness to work side by side with our existing team, and also, do they have the potential, if needed in the future, to be our sole customer service provider?
That's a key point, because you know, if you go and find an outsourced partner that is significantly better than your internal team, you're going to have to ask yourself the question fairly quickly, do we want this to be our sole customer service provider? So be prepared for the question.
4/ What is the outsourcer partner's track record with implementation? Talk to other companies that they've implemented change with to see how smooth that implementation is.
5/ Do they have a skill set that we don't have, but that we need? And sometimes that can be not just a skill set, but it can be a mindset, but I think it's a really key thing.
For example - Do they have something we don't have? Partnering with someone who may be a year further down the road in terms of AI, can save you a ton of time, money, effort, and energy.
6/ Will this partner increase our flexibility? The answer to that question has to be ‘yes’.
Where will that level of flexibility be, and is it in the right place at the right time?
7/ How many extra regions, how many extra languages, and how many extra people will the partner give us?
8/ Will they actually have the ability to flex quickly? If we see a sudden surge in usage or a surge in one of our products takes off, will they be able to meet the need very quickly?
9/ Will this partner be a strong, positive, additional voice in our organization? If you look upon this as sourcing a vendor, you're missing the partnership opportunity. A good partner is always going to be better than a vendor.
About John Riordan
John Riordan is Chairman of Quintas Capital, based in Cork. He joined the Otonomee board in 2022 and retired as Director of Support for Shopify in 2021. He has also served as Chairman of Shopify International Ltd.
John is also a board member of Grow Remote and The Sanctuary Runners, serves on the Irish Rugby Football Union Commercial & Marketing Committee, and is an advisor or board member of several start-ups and scale-ups, including Otonomee.
About Otonomee
Otonomee is one of the world’s first purpose-built, remote first, outsourcing companies (BPO) that provides partner companies with outsourced sales and customer support solutions.
