Unnecessary Outsourcing: Are you overlooking your Internal Resource?

By Laraine Geddes

We explore where resource utilisation is going wrong for many organisations and what they can do about it.

According to a recent Deloitte’s Global Outsourcing Survey, the use of outsourcing is not only accelerating, it is also transforming as organisations seek to keep up with changing technologies; Deloitte describe outsourcing as a ‘vibrant pathway for driving innovation in the enterprise’.

This sounds great, right? It’s interesting however to look closer at the reasons Deloitte’s survey respondents gave for outsourcing. For 59% of respondents, cost cutting is the major driver for outsourcing, while the enablement of a focus on core business issues comes second, cited by 57% of respondents.

Outsourcing, then, is figured to be both a cost-effective and a process-streamlining decision. But does it always work out that way?

Running at maximum

These benefits are only truly harnessed if the organisation in question has genuinely maximised all of the resource it starts off with internally. After all, contractors who are paid on an hourly, daily or fixed-term basis are usually more expensive than permanent staff, precisely because they are so flexible, and can be scaled up and down so rapidly. As such, organisations deploying them need to be really sure that they need them if they are not to waste money.

The whole thing becomes even more problematic when we examine the public sector – a sector, remember, which typically undertakes a great deal of outsourcing, sometimes in controversial ways. The value of UK public sector outsourcing was said to be up 168% year-on-year during the first quarter of 2014, in spite of a great many question marks at the time over the sector’s ability to manage outsourced contracts.

When the public sector outsources processes unnecessarily, and under-utilises its internal resource, this doesn’t just have negative connotations for that individual organisation’s resource and cost-efficiency; it means that citizens simply aren’t getting value for money in terms of council tax spend. It also cuts down on public sector organisations’ ability to fund services – a particularly problematic situation in an age of austerity.

Yet measuring to what degree an existing workforce is working to capacity can be extremely difficult, particularly in large organisations undertaking a wide variety of tasks across disparate geographical locations – like most public sector organisations.

What is the solution? How can managers, particularly those in procurement or operating in the public sector, get an accurate picture of how their workforce is being utilised, so that outsourcing decisions are made intelligently and strategically? How can outsourcing reliably deliver those cost-cutting and process-streamlining benefits, without the risk of under-utilising the existing workforce?

Visibility is key

Accurately assessing mobile workforce utilisation depends on achieving reliable, real-time and dynamic visibility in two key areas: the personnel within the organisation, and the tasks they undertake. And this where workforce automation comes in.

Mobile workforce automation solutions come in many shapes and sizes but, at their core, they are about planning, scheduling, recording and analysing workforce operations, from the day-to-day tasks carried out by individuals or teams, to the collaborative efforts of a disparate group of mobile employees. They are especially useful in large and dynamic workforces, where different individuals join and leave projects at different times, and travel between multiple sites – in short, exactly the kind of operations run by public sector organisations.

Essentially, every job that comes under an organisation’s remit can be tracked separately, with different timelines and different members of staff allocated to it. Progress of jobs can be tracked against Service Level Agreements, where necessary, and each individual’s capacity and productivity can be tracked too.

This kind of intelligence is invaluable to procurement managers, who can then make outsourcing decisions based on genuine intelligence and analytics, rather than broad-brushstroke statements or even second-guessing.

It is important to emphasise that this kind of intelligence isn’t simply about ascertaining which members of staff are busier than others, and which might have time to take on additional tasks. For workforce automation to work properly, it needs to offer synergy between personnel and processes; it needs to focus on how efficiently tasks are being completed, rather than how efficient individual members of staff appear to be. After all, any organisation, whether public or private sector, is simply trying to get through a list of jobs. Outsourcing occurs when those jobs seemingly cannot be carried out efficiently in-house – and yet a single pane of glass view over how all tasks are being completed can enable managers to rapidly reallocate staff and resource in response to how jobs are progressing.

Indeed, if reallocation is precisely what outsourcing achieves, then workforce automation solutions can engender the same thing without having to look outside the organisation’s own workforce. Only once the workforce is truly working at capacity, and only once each individual within that workforce has been allocated to the most pressing and appropriate task, do procurement managers need to look externally. And at that point, they truly can benefit from the cost-cutting and process-streamlining benefits sought, since the same technology can be used to track outsourced contractors, ensuring that they are used only for as long as truly needed, and no longer.

Outsourcing can be a vital string to the bow of many organisations, but it is important to remember that its benefits do not arrive automatically. For it to be truly worthwhile, outsourcing needs to be an option only when internal resource is being maximised in the most efficient way possible – and it needs to end as soon as possible. Workforce automation solutions are the key to making both decisions at the optimal time.

Read more about how Kirona can help organisations optimise their Field Service Resource Scheduling.