Outsourcing is a tool for getting work done, especially when you just don’t have the skills or the management bandwidth to do the work yourself. Outsourcing is often chosen because it can significantly reduce cost, either through more efficient processes or by better use of different labor markets. By using both global labor markets and the best work processes, an outsourced service could be offered at a dramatically different price point
than by performing the work internally. Of course, outsourcing isn’t the only way to achieve dramatic reductions in cost. Computer automation is another powerful tool for reducing the cost of work, and improving quality.
In any major corporation, there are projects that use outsourcing and technology together to achieve efficiency. How they work and how transformative they can be in combination is best seen when you look at a specific type of job. Today, we’re going to look at four job types that illustrate their impact.
- PROGRAMMING: The development of software is a natural for outsourcing, especially offshore. The value of the worker is based on the understanding of a computer language, not a human language. IF you know a specific computer language, it doesn’t really matter where you’re located. Once it’s completed the computer code can be electronically transmitted anywhere. Because large firms use a combination of software they have created or customized, and software that they have purchased from third parties, having someone else develop code is a
long-established tradition. While the technology isn’t new, the growing use of
“cloud computing” reflects the recognition that when we are all connected via
the Internet, the specific location of a server or programmer may not matter.
Expect the globalization of computer services to continue.
- DATA ENTRY: As far back as the late 70’s, different firms found that they could
ship large amounts of paper to be electronically coded… somewhere in the world
where English was spoken and typists were easy to find. Once it was coded it could then be transmitted back electronically. Outsourcing and offshoring tremendously reduced the cost of turning text to data. Which was convenient
because the number of pages of legal documents created in America was increasing exponentially. Over time, human text input has been supplemented or
replaced by OCR (Optical Character Recognition). Some corporations made use of this technology and insourced (took work function back from outsourcers) for a time. However, today most of this type of data entry is largely outsourced, using a combination of technology and people.
- PHONE SUPPORT: A hundred years ago there weren’t many large corporations and the telephone was a new invention. As corporations grew, the number of phones grew as well. Groups of phone operators had to direct these calls, and increasingly complex switchboards were needed to support the operators. This was followed by a need for “phone answerers,” specialized operators who didn’t just pass on the call but who answered basic product questions (rather than the customer visiting a store or support center). The support line was born. For years we alternated between electronic systems (press “1” for customer support, “2” for…) and outsourced call centers. Today, both have gotten better. In the end, technology always wins. In the short term has a role to play.
- BANK TELLERS: In the past, a position as a bank teller was a common first step in a business career. The teller sits behind a window at the front counter, and
customers go to the window to deposit or withdraw money. While teller positions
have grown slightly over the last decade, ATM machines have doubled in number,
increased in functionality and can be used at any time of the day or night. Because these functions need to happen on site, and in many sites, outsourcing
options are limited but the technology options are unlimited. ATM’s will take
over more teller function, but may in turn be replaced by even more convenient
technology such as on-line banking and smart-phone applications. Technology
isn’t just replacing teller functions, it is evolving them.
Technology and outsourcing go hand in hand in changing, and even replacing job functions. Few job descriptions today have been unaffected by outsourcing or innovations in technology. In the past many jobs could only be done one way, but today we have many more options on how to perform work, where to perform it from, and even if we should hire an outside group to perform it for us. Work isn’t just getting automated or getting sent overseas, it is evolving in response to changes in the needs of consumers and the demands
of the economy. Will outsourcing or technology have the biggest impact on your business? It’s difficult to say. However, you can be sure that whatever job you have, there’s a pretty good chance that it will evolve significantly in the coming years. And that’s my Niccolls worth for today!