According to a McKinsey & Company survey, cost management, growth and digital capabilities are three top priorities in both business units and corporate centers as they focus on tackling economic uncertainty.[i] In an effort to reduce costs and still show growth, companies are establishing strategies to define a new normal. Outsourcing is a business strategy that includes transferring work from a company’s employees to an external party. Many companies outsource their services and the creation of goods with the goal of decreasing costs such as employees, overhead, equipment and technology.[ii]
When establishing a strategy, a company will assess other benefits and methods to achieve these corporate directives.
- Establish a predictable budget for administrative costs
- Increase profit margins
- Reduce errors
- Increase cash flow
- Improve efficiency
- Increase productivity
- Shift focus to strategic activities
When a company needs to reduce expenses but still have the chance to utilize expert personnel, outsourcing is the best choice.[iii] At the end of the day, it is the best option for companies that choose to focus on more revenue-driving work.
Outsourcing in the energy sector is not a new phenomenon. For more than a decade or longer, energy companies have outsourced system administration, data center management, AR/AR, tax assessment and collection, joint-ownership billing, call centers and invoice printing. More recently, companies have sought out firms to provide BPO (Business Process Outsource) for cloud computing, data entry, utility customer service, marketing and sales.
In 2020, organizations have more access to specialized firms that offer options like onshore and offshore, full outsourcing and hybrid models. While SaaS and IaaS are common terms, these offerings for software and infrastructure are just the tip of the iceberg. As many companies look to reduce costs, and others look to grow, new service offerings are available.
- STP for exchange and broker trades
- Risk management services
- Credit management
- Modeling and managing complex processes
SS&C’s technology solutions stand out among service providers for both technology licensing and outsourcing. As energy companies look to pivot and develop new strategies in this new normal, they can take a cue from the fintech space. To learn more about our solutions that support energy-focused businesses, contact us.
[i] https://www.mckinsey.com/business-functions/operations/our-insights/the-corporate-center-driving-the-next-normal
[ii] https://investinganswers.com/dictionary/o/outsourcing
[iii] https://www.8x8.com/blog/insourcing-vs-outsourcing
