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How does the outsourcing trend fit into digitization as a whole?

It used to be that the vision of someone sitting at a home desk working on their computer for a company hundreds or thousands of miles away was a fantasy shown in science fiction movies. But that day is happening now. Many companies have improved their telecommuting options over the years and others have done away with entire departments in favor of outsourcing those tasks. But why has this change happened? It's all part of the digital transformation of our world and society summed up in the term digitization. Here's how outsourcing fits into this overall trend.

Part of the drive of digitization is creating businesses that are more flexible to rapidly evolving market conditions and more agile in their response to those changes. It's difficult to do that with a business that is laden down with departments that are essentially acting as services to the business as a whole, such as accounting, human resources and IT. They don't directly drive the business' profitability and represent a large portion of its overhead.

As digital transformation takes place in a company, further levels of specialization take place that allows the business to grow its profitability. Because the service departments mentioned above often do not deliver profit for the business, the recent trend has been to optimize, automate and outsource these departments and the processes they undertake for the company to help keep it profitable.

When the company outsources these processes, it allows them to use another company to complete the work. Because the secondary company is in business to make a profit as well, they focus on creating the most streamlined, efficient processes to get the job done well. This allows the first business to focus on what it does best.

Outsourcing isn't a completely new trend, but the attention it has received in the past few years is in large part to the shifts that digitization in our society and digital transformation in business are driving. Is your company ready to outsource some of its processes to ensure that it can remain flexible and agile for the challenges of the upcoming years? If not, the business professionals at AccountRely can help you develop a strategy. Please feel free to reach out today to get started.

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