Outsourcing Basics

The credit industry has undergone numerous changes in the recent past as the mortgage crisis has worked its way through all lending channels. Banks are faced with a number of challenges to overcome: streamlining lending processes, managing risk, increased compliance and reduction in operational expenses. As a result, more lenders are looking to outsourcing providers as a part of their strategy. Understanding the basics of business process outsourcing (BPO) can help you design a successful plan that can not only reduce your operational costs, but also create a more efficient production process as well as enhancing your customer's overall experience.

There are three basic strategies to outsourcing each with their own set of benefits (B) and challenges (C):

• On-shoring: using a services provider within your same country to perform the work
  
  • B: Higher level of industry knowledge and verbal communication skills
    
  • C: Higher cost solution
    
• Near-shoring: using a provider within similar time zones and close travel distance
  
  • B: Specific language skills at a lower cost; i.e. Mexico for Spanish
    
  • C: Language and cultural challenges in establishing a project
    
• Off-shoring: using a provider that is based overseas
  
  • B: Well educated staff, highly trainable and a lowest cost solution
    
  • C: Time zone, distance and remote management challenges
    

My personal preference is a hybrid option or what I like to refer to as "Rightsourcing". Rightsourcing is a combined approach using internal staff, an on-shore vendor provider in conjunction with an off-shore team to maximize benefits to an organization; increasing efficiency, a positive customer experience and lowering costs. The good news is that outsourcing is not a new concept and the challenges can easily be overcome with a well designed plan. Just like buying a car or building a home, a reputable vendor will be able to design a "rightsourcing" strategy with you to meet your specific business objectives.