The Hidden Benefits of Near-Shore Outsourcing

In light of the financial pressures faced by investment banks, there has been a significant increase in outsourcing over the past few years. Traditionally, outsourcing has been viewed as consistent with offshoring given the domicile of the major players.  Without question, offshore-outsourcing has resulted in significant cost savings – but what else has it achieved?

 

Is there an alternative outsourcing arrangement available, such as near-shore, and does it have hidden benefits that make it a more attractive proposition for investment banks to utilise, albeit at a slightly higher cost?

 

When it comes to outsourcing, value is the deciding factor for investment banks.  However, with value, the focus is usually on the cost effective aspect. Price should not be the only focus, the promotion of process improvement through encouragement and reward to provide product quality should be the deciding factor in the search for outsourcing value.

 

Business-As-Usual (BAU) processes always have room for improvement and increased efficiencies. The idea that a process should constantly be critiqued should be an ethos adopted by all. In many projects, the specified business requirements are based on ‘what we do now’. Often, nobody has questioned whether 'what we do now' is optimised for efficiency, addresses a genuine business need or is simply an accepted workaround to accommodate a constraint of an existing system. Defining, or redefining, the shape of BAU is critical to assuring maximum business efficiency. In the current competitive environment, improvement and progression should be the focus as a business left standing still is a business moving backwards.  This value of outsourcing service can only be delivered from an area with a surplus talent and lower cost of living. This is evident in the case study below:

Near-Shore Case Study: Process Improvement

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In the duration of a year, a near-shore operation in Belfast was able to implement 12 value additions to improve the process of their client leading to a reduction in risk, increase in data accuracy, enhancements in control and an improvement in efficiency. This has resulted in an increase in tasks undertaken by the team of 50%.

Automated Report Reconciliation

 

An example of these process improvements is the creation of an automated report reconciliation tool, reducing the workload from 8 resources taking 4 days to 5 resources taking 1 day, creating process efficiency of 84%.

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Task

Monthly report

 

Process Issue

Manual calculation

 

Belfast Process Improvement

Automation of calculation

 

Benefits

Improved efficiency

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​This case study shows that near-shore outsourcing should be the new proposition, providing everything encompassed in value through a cost effective solution along with adding real value through continued process improvement, bringing to light the hidden benefits in near-shore outsourcing.