Article written by Beirut Digital District on July 14, 2020.
As the global pandemic swept over the globe, seemingly overnight, businesses were forced to adapt, some disappeared and others took off with record breaking results, namely video conferencing solutions, e-commerce and delivery service companies. As businesses that were heavily impacted scrambled to cut costs, headcounts were reduced, spiking unemployment rates. One trend that was on the rise as companies worked hard to remain relevant and adapt quickly, is outsourcing.
Companies looking to scale up need to have an honest look at their existent resources. The team may be overloaded and unable to lead on new innovation projects. Or simply, they may lack the required skills needed to create a more competitive company, product or service. The solution in such a case is to outsource core functions to qualified professionals. On the other end of the spectrum, the local market may be too small to scale up and achieve targeted growth. In such a case, companies and freelancers should look beyond borders, at markets that demand their services and products.
BDD sat with different companies involved in outsourcing in Lebanon that either outsource to international markets, or are creating jobs for qualified talent, to ‘export’ needed skills from Lebanon to the world. They highlighted the main reasons why companies outsource, the impact of the crisis on outsourcing, along with the benefits tied to outsourcing.
Why do companies outsource?
The global economic crisis, accelerated by the COVID-19 pandemic brought it with many lessons for businesses and professionals.
– The first lesson is to keep costs low
– The second lesson being that suddenly, more could be done with less
– The third lesson is that if brands don’t adapt, adopt and grow, they may become irrelevant overnight.
– And the fourth lesson is that for companies to remain relevant and survive at a time where only news on the pandemic and the economy dominated headlines, team members with the needed skills needed to step up and power through.
Jobs for Lebanon (JFL), a not-for-profit organization focused on creating a global digital “alternate” economy and job marketplace for individuals in Lebanon, have seen an increase in companies outsourcing their high-value functions. “When companies outsource non-core business functions, they can focus on their niche area and deliver better results to their clients while allowing outsourced experts to focus on theirs,” shares Yalda Aoukar, from Jobs for Lebanon. “The benefits include increased in-house efficiencies, access to skilled experts, the opportunity to concentrate on core competencies, cost reductions and having an increased competitive edge,” they added.
George Akiki, CEO and co-founder of Lebnet highlights that outsourcing is not a new trend, but has been around for over 20 years. “Outsourcing allows companies to cut cost especially if they are in high cost areas such as Europe and the US. In addition, with technical skills becoming prevalent around the world, these companies do not have to make concessions on quality.”
On building remote teams, Fadi Bizri, Co-founder and Project Manager at SE Factory shares his insights. “When it comes to digital work, programming and design etc. people have been building remote teams for a long time. There is a wide trend for outsourcing, as there are many countries with excellent talent, and this trend will continue to grow.”
Charbel Karam, Business Development & Marketing Manager at B.O.T highlights numerous reasons as to why companies opt to outsource. “When faced with adversities, a company’s strategy shifts to cutting down on costs and optimizing business flows. This usually means a major restructuring of departments to create bigger workloads for core staff and eliminating non-core personnel. However, this strategy is only efficient in times of low demand; most companies that assume this strategy are faced with new challenges when their workload increases and their customers are back asking for their services or products. Since the demand in these challenging times is constantly fluctuating, the need arises for project-based assistance in core function positions, and this is where outsourcing comes in with the solution. By outsourcing, companies are able to continue providing the same level of demand to their clients without taking on permanent overhead, and utilizing their budgets in a more efficient manner.”
Lea El Hachem, HR Coordinator at ProAbled shares that “Outsourcing showed a lot of positive outcomes for companies. In fact, firms nowadays are worried about sustainability, especially during the economic crisis. Shifting towards an outsourced workforce decreases the workplace costs: such as, electricity, maintenance, and other fixed expenses. Plus, having flexible workers only doing their duties on projects basis, leads to flexible wages payments. Persons with disabilities – who show loyalty, dedication, productivity, and excellent results, are best fit for these kinds of jobs, especially with jobs requiring work from home.”
What are the benefits of outsourcing for companies?
– To focus and become more specialized: When companies outsource, their teams can dedicate their time to core business functions that can generate timely results. When teams are able to focus on certain areas of business, their skills and levels of specialization grow.
– To innovate: Companies need to remain relevant and competitive, and predict industry and market-based disruptions that can impact their business. In this regard, experts can be seeded to provide their expertise and contribute to improve a product, service or offering.
– To optimize costs: By reducing fixed costs, companies will be more able to survive in times of crisis. Outsourcing provides a cost effective way to maintain the same levels of quality and productivity internally, whilst ‘external’ experts work on innovative or transformative projects.
– To advance digitally: Globally, there are thousands of companies that are leading on the technological advancement front and working on digital solutions in various sectors. By outsourcing digital and tech-based functions, industry experts can lead companies to transition into an automated, intelligent future.
Is there a link between a crisis and outsourcing?
Industry experts in Lebanon highlighted the business case to outsource, the industry shifts pre and post COVID-19, and what outsourcing allows companies to achieve.
“With the economic consequences of the COVID-19 pandemic, there is no better time to consider outsourcing as a means to optimize costs and shift the focus of core teams on what will help drive revenue growth,” shares Karam of B.O.T. “The social distancing and confinement measures put in place as a result of COVID-19 have pushed people to adopt digital tools much faster than they would have under normal circumstances. In fact, we are witnessing the most rapid digital transformation that the Middle East has seen in years.”
Speaking from their experience, Aoukar from Jobs for Lebanon highlighted the shifts as a result of the pandemic. “Post COVID-19, technology and software development companies are more open to outsource administrative, book keeping and accounting functions, technology testing, maintenance, as well as support services,” she shared.
“Another important factor to consider is the agility that comes with outsourcing. Hence, giving additional benefits would be a choice to the employer, which is not always the case with full-timers at the office,” shares El Hachem of ProAbled.
For companies seeking to outsource some of their non-core functions, an internal study needs to be conducted first. The core competencies of the team need to be mapped against medium and long-term goals. Accordingly, functions that can be outsourced can be identified, and the search for talent can begin.
Global opportunities are abundant, and Lebanese professionals are capable to differentiate themselves and attract new business prospects. BDD’s vision is to power the outsourcing capabilities of Lebanese companies and talent, through its optimized workplaces, high speed internet and essential amenities, making it a prime location for professionals to thrive and service international markets.
Original blog resource: https://beirutdigitaldistrict.com/blog/what-are-the-trends-lessons-in-outsourcing