Focus on core competence, outsource commodities | Business ...

12 February 2012

Handing over the burden of distracting back-office functions can allow companies to focus on the areas that will bring the greatest benefits

Outsourcing is so well established among major financial institutions that it creates little comment. But there are many start-ups and niche players, such as pay-day loan specialists, branded banking operations of retail companies and UK branches of foreign banks that could derive great benefit from selectively outsourcing parts of their operations.

?We?ve been providing specialist back-office services to all the major UK retail banks for more than 25 years,? says Rod Edwards, managing director of Parseq, a UK-based niche BPO (business process outsourcing) supplier.

?The functions that we have been providing to the large banks are also required by smaller organisations. But they wouldn?t dream of going to the expense and effort of building, for example, a new payment system and updating it as legislation and regulations change, or an account receivables system with all the automated equipment required to read cheques and remittances, or match BACS payments. They leave that to us.

Smaller players and start-ups can share in these benefits and gain extra advantage such as reduced time to market, Edwards believes. ?We?ve set up inbound and outbound contact centres in less than three months, and complete back-office operations in less than six months. If companies did this from scratch, it could take a couple of years.?

An outsourced operation is highly scalable. ?When a new bank or institution launches it often has no idea what volumes to expect,? says Edwards. ?With strong marketing and aggressive interest rates it may receive a huge volume of applications, and if it can?t open and service accounts quickly enough it can suffer significant brand damage. We have the capacity to absorb these spikes of demand.?

A new financial institution may never need to invest in its own systems, property or people to perform its back-office and customer-facing operations. ?An organisation such as Parseq can provide all of the key processes for a ?virtual bank?, including its contact centre,? says Edwards.

Above all, outsourcing enables the management of the new company to focus on what really matters. ?If you?re an entrepreneur setting up a pay-day loan company, you want to focus on things such as marketing, branding and risk management,? says Edwards. ?Routine back-office functions are just a distraction. The secret of successful outsourcing is to identify what differentiates you from the competition, keep that in-house and outsource the rest to a specialist.?

This is why major banks and other financial services firms are prepared to share the services of a company such as Parseq, adds Edwards. They want their back-office functions executed professionally and securely, but accept that these are largely commoditised and they achieve their differentiation through other aspects of the business.

In the early days of outsourcing there were many large, single-supplier deals, but things are changing now. ?In the past few years we?ve seen a trend towards using a combination of specialist, best-of-breed outsourcers,? says Edwards. ?Companies like ours offer an identikit set of component parts that our clients can assemble in the way that brings them the greatest benefit.?

Parseq, previously known as Documetric, is the new name for a UK-based, technology-led BPO company with decades of experience.

01709 448000

www.parseq.com

Source: http://business-reporter.co.uk/2012/02/focus-on-core-competence-outsource-commodities/

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