Business

How can IT Outsourcing save money in a Downturn?

In the early days of outsourcing, businesses looked for IT service providers to reduce costs. Cost-reduction came from areas such as shared service models, shared operations infrastructure (firewalls

, switches, disaster recovery sites), and elimination of IT staff management issues (absence, overtime payments). There was a tacit understanding that services would be delivered to the same standard as those provided in-house.

From this evolved a focus on service improvement where factors such as downtime, system availability and helpdesk response times were incorporated into service level agreements (SLAs).

As the outsourcing market matured, provision of IT services to an agreed level became the starting point. Outsourcing began to play a longer-term, more strategic, role. Value became measured in terms of business outcome – project ROI (Return on Investment), for example.

The current economic downturn now poses a problem to IT Service providers. Long-term investment in IT projects has generally ground to a halt. ROI is expected to be achieved with the financial year, and decision-making is taking longer as CIO’s and look at all delivery options – both internally and externally. Service providers are being asked to take on extra risk, for example moving to a cost per transaction rather than providing a resource-based pricing model.

The golden age of outsourcing has gone and changes need to happen within all parties. For the business, this means reducing the number of vendors and building closer and stronger relationships with the chosen suppliers. To be successful in the new economy, IT vendors will have to adapt to creating risk-based supply models and both understand, and demonstrate a greater awareness of the business value

they deliver.

Collection Agency - You Have Three Options to Deal With Bad Debt

If you have piled up bad debt on your books, you have three options.

1. Assign bill collection to in-house Accounts Receivables

If a payment is being delayed, the in-house Accounts Receivable (AR) department is assigned the job of collecting dues from the customer. It is in the interest of both customers and your business to share a good relationship. Customers want products and services from trusted companies and companies want continued sales to customers.

The AR personnel work out a payment plan with customers who are unable to pay on time for any reason. The AR personnel can take informed decisions on these accounts, as they know the customer and understand the business need. They also have the authority to withhold pending orders of these customers, to refuse new orders, and to warn them about possible legal action.

If the delinquent customers are still unresponsive, AR personnel can decide to call in professional collection agencies to collect the debt.

2. Hire a professional collection agency

The chance of a debt being recovered reduces with time. Non-payment or delay in payment of dues is costly to your business as it reduces your revenue. When it becomes apparent that a customer is not responding to invoices and payment reminders, it is time to consider using the services of a commercial collection agency.

Collection agencies offer professional services for collecting debt. They charge 15% to 50% of the collected debt based on the age of the debt and the effort put in to retrieve it. However, the actual amount of debt they will recover from the debtor cannot be ascertained in advance. The point of time at which you decide to pass the customer account to the collection agency is very crucial. The earlier, the better. Timely intervention of collection agencies results in higher collection at a lower cost.

It is not easy to decide when to call in a collection agency. You need to assess the best time for recovery of debt. Sometimes, a collection agency is called in when continued contact by the AR personnel is going to adversely affect the relationship with the customer.

3. Sell your debt to debt purchasers

Selling the debt to a debt purchasing agency is an option when your business is low in capital and needs funds urgently, or you do not have adequate staff to pursue bad debt collection. The upside of this is that you get your money immediately irrespective of the amount recovered by the debt purchaser at a later date. The downside is that the debts are priced very low in the market. However, if you had written off the bad debt, it is better to get some of your money than nothing at all.

Deal with those unpaid bills with a sense of urgency. If you ignore them for long, you may have to write them off. But if you take timely action and hire a collection service, the possibility of collection is reasonably high.

Before you hire a vendor, compare price quote from multiple collection services at a Business Network. For further information, please refer to detailed buying guide to hiring a debt collection agency.

Call Center - Top Five Benefits of Outsourcing

Much, however, depends on your available resources including manpower, infrastructure and technical know-how. While large businesses may go in for their own call centers, majority of the mid-sized companies find outsourcing a much viable option.

Listed below are five advantages of outsourcing your call center:

24/7 support to customers across various time zones

In todays' globalized environment, businesses often have customers spread across various time zones and they expect twenty-four hour customer service.

Call centers, with 24/7/365 operating model, ascertain that customers get the required assistance whenever and wherever they need them. Such activities help cement ties between the consumers and the company and retain them in the long run.

Save on cost of establishing in-house call center

Establishing an in-house call center involves heavy investment on infrastructure and hiring and training of required personnel. This results in diversion of crucial resources from the core operations of the company.

Outsourcing these tasks to call centers takes care of the entire process of preparation, relieving the company of the headache of putting in place every small element and managing the operations all along.

Tap into required expertise

Maintaining an in-house call center is treated as an extra responsibility for businesses. On the other hand, call centers that are exclusively devoted to these operations treat it as their primary task, concentrating all their energies to deliver very high quality service. It is almost impossible for your company to reach that level of expertise. Thus, outsourcing call center services ensures excellent customer support services.

Focus on your core competence

It is important for every company to focus on its core competence and rely on outside experts to handle tasks that are not part of the core. Call center is one such area that should be outsourced since making and receiving calls is their bread and butter and it would be tough for you to match the quality of service they generally deliver.

Utilize advanced and specialized services

The bouquet of specialized and advanced services that call centers offer today go beyond expectations of the company. In fact, one has to be very careful in making the right choice of the vendor and the collection of services. The right kind of partnership with the appropriate vendor can contribute towards the success of the company at large.

It is not for nothing that call centers are becoming the new buzzword in the world of business. The positive contribution they make to companies far outweigh the investment made in hiring them as partners in business. Specialized call centers are here to stay and help you succeed.

Before you hire a vendor, compare price quote from multiple call center outsourcing firms at a Business Network. For further information, please refer to detailed buying guide to hiring a call centers services firm.

PBX Phone Systems - Managing Growth

This is because large companies usually have hundreds of phone calls coming in on a daily basis. There needs to be a system in place to manage all these incoming calls. Such a system is known as a PBX phone system.

A PBX system allows a company to route calls to the right department or personnel. For enquiries that are repeated on a daily basis, the right responses can be programmed into the system so that the caller can get the solutions instantly without having to wait for a human operator.

Unfortunately, PBX equipment is very expensive to install. And only large companies with deep pockets can afford to install such a sophisticated phone system.

However, due to lowering hardware and software costs, PBX equipment is now affordable at more affordable prices. That means even small businesses can afford to install sophisticated phone systems to help them grow their businesses.

Small businesses usually run into the problem of not being able to manage the growth. Without appropriate systems in place, it is almost impossible to scale a business. For instance, a small business may consider placing an advertisement on TV. After the advertisement is aired, the phones may be ringing off the hook. So who is going to handle the multiple phone calls that are coming in all at the same time?

The solution, of course, is to install a PBX system. The equipment can be setup to work with existing telephone lines, so there is no need to replace existing wiring. These systems are fully featured systems, but they are smaller compared to those used by the large corporations. All that is transparent to the consumers.

When a consumer makes a phone call, the call is handled by the phone system. You may set up an auto attendant to pick up the call and program the responses accordingly. Managing calls in a systematic manner is a much more professional way of handling incoming calls.

The presence of a PBX system takes away the need to hire an entire team of staff to handle the calls. Instead of having to hire 10 employees, you may now need to hire only 2 or 3. The bulk of the work is done by the automated systems.

If you do not wish to deal with the hassle of setting up PBX equipment, you can always choose to use hosted solutions. Hosted solutions offer similar features, but you don't have to setup the equipment yourself. The benefit of using a hosted solution is that you can choose the type of features you want with ease. In the event that you want to cancel or change features, you don't have to worry about being burdened by the equipment.

If you are not sure which way to go, start with hosted solutions. Once you are more familiar with the features, you can start investing in PBX equipment for more long term savings.

Scalability: Why Small Businesses Outsource

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;}

Mature industries like banking, pharmaceuticals and insurance have been outsourcing for decades - even before the term became popular. These verticals have standardized processes in their industries which enable them to easily scale – based on the economy and market conditions.

Because outsourcing has become available to small business owners and online professionals, you can now expect the same level of scalability, efficiency and cost savings that exists in other well-managed businesses that leverage outsourcing.

According to a report titled “Global Sourcing Trends in 2009” by U.S.-based law firm Morrison and Foerster: Most outsourcing transactions intend to produce immediate improvements to the bottom line for businesses. While this is a common reason to outsource, with fluctuating economic times like we have been experiencing lately, the flexibility to scale up or scale down (based on the business’s needs) has been the determining factor to outsource.

Smart executives are using outsourcing to build flexibility and scalability into their businesses—and to gain access to a global pool of skills at competitive cost.

The recent economic downturn led many companies, especially those who don’t have existing outsourcing contracts, to consider outsourcing. But companies who already have outsourcing agreements are re-evaluating their outsourcing decisions to find providers that offer more business continuity and integration.

In an environment where Fortune 500 companies have disappeared overnight, a successfully executed outsourcing partnership could make the difference in a company’s ability to ride out these challenging times. The flexibility to bring on needed help and expertise in times of growth – without committing to a project contract or adding people to the payroll, has been an invaluable solution to the small business owner and online professional. In addition to providing scalability, this also allows the owner to focus on core competencies of the business.

Outsourcing provides businesses with instant scalability and service flexibility, as well as reducing overhead costs. One of the major advantages of outsourcing is that companies can now get the best from new developments without the expense.

In terms of new technologies, new processes and new ways of doing things, you don't have to invest to do that in-house. Outsourcing is also particularly beneficial for new businesses, or those looking to expand their operation. This includes those who do not necessarily know what hardware or software they will need.

Outsourcing providers with more experience should be able to advise companies about where to spend their money, so that they do not waste time and resources.

Any hesitation to outsource may be affecting your company's chances to effectively scale for growth in this highly competitive business environment. As a small business owner or online professional, carefully consider your outsourcing partner when looking to expand your business and make it globally competitive. When considering a company for outsourcing, make certain that they are equipped to handle the ebb and flow needs of your business when scaling up, and when scaling down!