What is outsourcing?
Outsourcing is a strategic business process of delegating to a third party. Offshoring relies on outsourcing to other countries to utilise resources. Both methods are applied with the aim of increasing efficiencies and saving money on labour costs.
When thinking about outsourcing two words spring to mind, trust and quality. By assigning a job, task or role to a third party a company needs to know that the work will be managed at the same or to a higher standard if undertaken in-house.
But in an industry like the TIC Market, a function built on providing asset assurance to governments, clients and companies, the thought of outsourcing comes with a great deal of consideration. The cost of getting it wrong could not only impact financials but also reputation and public safety.
With 58% of the industry preferring to manage their regulatory obligations in-house that still leaves 42% that have opted to outsource. There are many reasons as to why a company would choose to outsource the job of asset certification and not all are related to money.
Why outsource?
1. Resources
One of the biggest factors is a lack of skilled resources in-house. Outsourcing provides an immediate solution to hiring and training in-house staff to the required level. Using contractors reduces operational expenditure delivering significant efficiencies and negates the need to pay workers on a permanent basis.
2. Timeframes
Contractors are deemed as experts and come readily prepared with experience. They require less time to familiarise themselves with the tasks at hand, having already obtained the skills to complete the work to a higher standard. Meaning they can start quickly to meet timeframes.
3. Top Talent
Sourcing top talent from a localised position is not always possible for businesses. Instead using a third party will extend the search to find the right people for the job. Offshoring provides greater outreach to access cheaper labour in other countries.
4. Partiality
One of the most significant reasons is partiality. Contractors can offer a different perspective and are focused on the task at hand rather than being swayed by internal politics. A certificate approved by a third party could be seen to be worth more than one received by internal staff.
5. New Technologies
The TIC Market is currently undergoing many revolutionary technology changes. Ones that have seen an industry transformed into the digital age. These disruptive approaches enable Inspectors to apply newer technologies to their work including the use of unmanned aerial vehicles, machine learning and artificial intelligence. This modern level of working means they can perform their duties quicker, safer and to a consistent standard.
6. Focus
Using a third party provides high level management with time to apply their focus to other operational aspects of business, those relating to core goals and planning. Internal resources can be reassigned to work on projects and other initiatives.
7. Processes
The TIC market relies on relationship management between supply chains. Contractors who specialise in these tasks are more likely to have relationships already established. This means a company can take advantage of associations that they wouldn’t necessarily have access to in-house.
8. Expansion
Delegating parts of business functions to other countries will increase globalisation and overseas advantages. An obvious gain would be the difference in time zones, saving valuable time on client contracts and expanding capabilities to 24-hour working.
Success when outsourcing
Similar to any strategic advantage there are always the downsides. These usually come in the form of lack of control, poor communication and a negative impact on full time workers resulting in a decrease in productivity. These can be overcome and shouldn’t stop a company from considering outsourcing. Instead they should be managed internally to avoid an overspill into business operations.
Finding resources
At VERITAS we supply a high-level of talent to the Energy TIC Market. Through our unique QA/QC platform contractors can apply directly for client contracts choosing those that matches their skills. This approach enables us to offer our clients an extensive pool of resources who are committed and trusted to deliver inspections to the highest quality and standard.
Conclusion
The advantages of outsourcing and offshoring is evident. From reducing labour costs, to meeting timeframes and partnering opportunities, the requirements for outsourcing has increased significantly since the 1980’s.
As more businesses begin to realise the huge potential that can be offered by delegating to a third party, the demand is high for skilled workers in all sectors across the globe. For the TIC market and its clients this means cost effective assurance and for consumers, this means safer products.