5 key reasons to outsource

Accounting, IFRS Payroll Processing HR Administration Business Immigration Services 5 KEY REASONS WHY OUTSOURCE 5 KEY REASONS WHY OUTSOURCE TO BPOCOM

, 26.11.2009

Is the Crisis Over?
By Thomas D. Nastas

Has the world economic crisis reached its bottom? Clearly, the first signs of recovery have appeared. This means that the hope of improvement in the labor market has appeared too. Is it possible that the lean times have already passed, and that the end of the extremely complicated situation in the world markets will be as sudden as its beginning? What lessons can Russian executives draw from the preceding crisis?

Without a doubt, emotional reactions to recent economic proceedings can have a real effect on market behavior, accelerating loss or enabling gain, but market confidence alone is not enough for a quick recovery in collapsed economies. It is impossible to deny that the recent economic crisis has been not only felt, but very painful to all strata of the population. However, just as exposure to disease is necessary for the human immune system to improve itself, this crisis will have a most favorable effect on the Russian economy, by providing country, company and individual with a good lesson in crisis management. The only complaint is that the majority has and will pay a very high price for that education.

Never before in the era of the Russian free market has it been necessary for executives of so many different enterprises to implement such large-scale reductions of expenses, due to decreased production, examining each expense “with a fine-toothed comb.” Never before has the “human factor,” a fundamental component of any production process, been as poignant and painful as at this time. Seven out of 10 businesses were forced to reduce personnel, on a limited or extensive scale, to ensure the survival of their company and protect as many jobs as possible under prevailing conditions. The tragedy of reductions served as a good motivator for the analysis and revision of earlier common models, concerning traditional labor mobilization. Many looked at what had once seemed a natural and beneficial resource, i.e. their own personnel, with a new perspective, and began to assess the real costs, risks and social benefits. More and more executives, who are responsible for a company’s profitability, began to look at modern methods of safeguarding their business and alternatives to hiring their own personnel.

As the economy improves, companies look to hire new staff to manage increased workloads. But higher employee headcount adds fixed expenses to the balance sheet, and given the unpredictability of the recovery, companies might consider outsourcing as a variable cost solution to manage increased work loads. Since outsourcing is ‘scalable’ to the workload, it gives companies a way to adjust variable costs as economic conditions dictate.

The amount of outsourcing services available in Russia today is already great enough that any company can take advantage of them to fulfill any number of functions, which had earlier been handled by internal departments, saving both time and money on the hiring, training and management of personnel. Accounting, payroll, clerical services, tech-support, call-centers and office management are some classic examples of formerly internal services transferred onto the market in order to optimize business.

Outsourcing transforms fixed expenses into variable costs so employers can better manage time, resources, capital and cash. Outsourcing reduces clients’ personnel expenses as they outsource only the necessary amount of tasks to get results desired.

Outsourcing has other benefits; because service providers are experts in business processes, they have deep knowledge in the most modern management and technology techniques used to manage these functions. Such expertise ensures the continuity of their clients’ business so companies can concentrate their efforts and resources on their profit centers as new revenue opportunities open in the market. Staff leasing and temporary staff services for accounting, payroll and tax declarations are just three of the prime cost centers ripe for outsourcing in today’s market.

Simultaneously the demand for outsourcing services also requires people to be ready to consider nonstandard conditions regarding the use of their labor. This testifies to a sufficiently high level on the market and high level of outsourcing’s development. In particular, it testifies to its ability to resist negative factors inherent in the global economy and to guarantee adaptability and stability.

One could also see the readiness of people to adapt to temporarily complicated conditions as “sagging” under a changing world, or on the contrary, as a developed ability to resist and to defend their long-term vital interests and plans, through the manifestation of flexibility and readiness to make concessions.

Today it can confidently be said that, due to crisis conditions, outsourcing will find a second and prolonged life. It will become one of the most popular business tools, not only in all areas of recovering economies, but also as a long term method of maintaining the stability and effectiveness of business models.

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, 27.10.2009

Make your costs smart
By Maxim Stepanov

We are hearing from many sources that the world economic crisis has reached its bottom. Over the last 12 months, companies have examined each and every cost in their operation, looking for any expense to eliminate or decrease. Seven out of 10 businesses have reduced personnel head count, salaries and benefits on a limited or permanent basis, to ensure their survival as the global economy spiraled downward. Now, with economic conditions improving and wage demands on the rise again, employers are seeking solutions to keep their fixed costs in human capital at their current levels. Yet, how can this be done when improvements in demand necessitate increases in headcount, salaries and benefits?

Employers have a variety of instruments to “right-size” their labor force as demand in their business goes up and down, as economic conditions fluctuate in their industry and as the availability of skilled labor moves from surplus to shortage. One strategy to cope with these uncertainties is to engage temporary help, lease employees or transfer certain business functions to outsourcing service providers.

Accounting, payroll, clerical services, tech support, call centers and office management are classic examples of cost centers transferred to outsourcing companies by employers to keep their organizations “right-sized” as demand increases. Business process outsourcing services are available in Russia to fulfill these functions, saving time and money on the hiring, training and management of personnel.

Through outsourcing, fixed expenses become variable costs. Transforming a permanent cost into one that can be proactively managed up or down as conditions dictate enables employers to better manage time, resources, capital and cash. Outsourcing reduces clients’ personnel expenses as they outsource only the necessary amount of tasks to get the desired results.

Outsourcing has other benefits. Because service providers are experts in business processes, they have deep knowledge of the most modern management and technology techniques used to manage these functions. Such expertise ensures the continuity of their clients’ business so companies can concentrate their efforts and resources on their profit centers as new revenue opportunities open in the market. Staff leasing and temporary staff services for accounting, payroll and tax declarations are just three of the prime cost centers ripe for outsourcing in today’s market.

In one way, the crisis has taught us to identify employees who are truly critical to our long-term success. Ups and downs in staffing as normal consequences of business cycles really are detrimental to employee morale, to recruiting, attracting, motivating and retaining high achievers. Since no one is immune to the negative effects of downsizing, solutions like outsourcing stabilizes employment levels since employers can shift business functions to service providers. Because of their specializations, they are able to recruit, attract, motivate and retain the high achievers that are needed to make your business a success.

Outsourcing will see new growth as the Russian economy revives. It will become one of the most popular business tools to maintain the stability and effectiveness of the business models of international companies operating in Russia, and Russian enterprises. Outsourcing transforms fixed costs into variable costs that can be scaled up or down as business conditions demand to give companies more flexibility and control over their business.

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Seek a way to reduce your business administration cost ?

Look for a solution to turn fixed costs into variable, to be able to quickly and painlessly adapt to market changes ?

Strive for reducing risks, related to hiring, training and controlling your own personnel ?

Starting new business or need to cope with seasonal fluctuations ?

Wish to obtain world-class capabilities and modern technology to satisfy your business needs, to make internal operations more productive ?

This is the right time to consider BpoCom's business process outsourcing services to meet your specific needs and expectations.

1. Outsourcing permits improve company focus, free its capital and human resources for other purposes.
The main rule of outsourcing says: "I keep those functions which I can do better than others, and I transfer the functions which an external provider can do better than others" Outsourcing is the way for an outside expert to assume responsibility for operational details of the tax, payroll, accounting and bookkeeping functions, enabling management to focus on the more important business issues of operating and managing their business.

The executive management of a company requires its owner or top-manager to possess not only the corresponding knowledge and experience, but also significant time to it organization, maintenance and constant control. A professional company with accumulated experience and well-developed business processes regarding various trifles attained through the work experience with similar enterprises and the tasks, will be able to grant this experience in the ready form on "turnkey" basis, as an effective alternative to the operating time of ones own experience through trial and error.

Outsourcing frees from the need of using company's resources to carry out non-profitable administrative functions, makes it possible to economize on office space and the related expenses.

Outsourcing permits companies to direct their resources from non-core activities to those that have the greatest impact on the business. Contracting out operational expenses reduces the competition for internal capital since the outsourcing company provides the investment as part of its overhead. Contracting on an ‘as-needed/used’ basis reduces long term investment. Every organization has limits on the resources available to it. Outsourcing permits an organization to redirect its resources, people, to greater value adding activities; staff whose energies are currently focused internally can now be focused externally - on the customer.
2. The possibility of quickly and effectively reacting to changes, constantly occurring on the market, and within the company itself.
Outsourcing removes limitations on an increase in your business, and an agreement with an outsourcing company is much more flexible than working via a contract with a staff employee. This is especially relevant on the Russian market, where the labour legislation ensures that each employee not only has priority in rights and protection, but also has significant advantages in the event of any labour disputes with the employer.

Outsourcing is the best solution in the stage of the organization of a company or its entry into a new market. This makes it possible to pass the initial stage of the formation of the business with the minimum of risks, and also with the minimum financial and time expenditures.
3. The possibility to decrease expenses after converting the fixed expenditures into the temporary ones, while having simultaneously increased the quality of work performed.
Reduced Overhead – The hidden costs of hiring an employee begin with recruitment. Next come the costs of employment, payroll taxes, office space, computer, benefits and other miscellaneous expenses. All of these costs are built into one price when you use BPOcom. Since our costs are spread over multiple clients, the cost to you is less than the costs of building the function internally.

A contract with an outsourcing company makes it possible to flexibly and effectively regulate the number of administrative personnel, if necessary, by enlarging or reducing it to the optimum level required at a specific time.

The main product and the advantage of outsourcing is the liquidity of human resources. You acquire exactly as much operating time from the specialists necessary to you as necessary to your business at that specific moment in time and not more. Within the framework of the outsourcing contract you pay only for the effective hours of the employee. Expenditures for the search and selection of a qualified employee, his professional preparation and increase in skills, the compensation for his time-off, or temporary disablement, and also the possible risks and expenses connected with his non utilised time are completely dealt with by the outsourcing company.

Tremendous risks are associated with the investments an organization makes. Markets, competition, government regulations, financial conditions and technologies all change quickly. Keeping up with these changes is costly.

Outsourcing providers make investments on behalf of many clients, not just one. Shared investment spreads risk, and significantly reduces the risk born by a single company. Outsourcing enables management to delegate certain kinds of risks like demand variability, availability of staffing and investment to the outsourcing provider. Unlike the buyer, the outsourcing provider can spread these risks over multiple clients.

Russian tax, accounting and payroll legislation can be confusing to international that report to IFRS. The requirement to report all financial statements to Russian legislation can result in unclear management expectations or difficulty in performance. Solving this issues and having the proper control procedures are outsourcing.
4. Through using outsourcing, you get access to an extensive wealth of collective knowledge and experience, obtain resources not available internally.
On the strength of the fact that an outsourcing company deals with many clients, it has the capability to draw on experience, accumulated through its work on the tasks of one company, for the successful fulfilling of such tasks analogous in another. That makes it possible not only to economize time to study and search for the necessary solution, but also to avoid many risks - which can result in financial losses. In concluding an agreement with an company on the fulfilment of a specific function, you acquire the knowledge and experience of all the employees within that company, regardless of the fact that it is only one member for you who will directly fulfil this function. In hiring for a task one single employee - you obtain only the knowledge and experience of this specific person. By outsourcing, you considerably enlarge the volume of knowledge and human resources for the rendered assistance to your growing business always when necessary.

The quality of services provided is guaranteed by professionals in different regions when a question or problem is related to several different, but interconnected, business functions and their "boundary" areas.

Outsourcing brings world-class capabilities and modern technology to help clients satisfy the needs of their internal operation, to be more productive. Outsourcing providers make extensive investments in technology, methodologies and people. They gain expertise by working with many clients facing similar challenges. This combination of specialization and expertise gives you a competitive advantage and helps you avoid the cost of hiring staff, spending capital on technology and training. In addition, there are better career opportunities for personnel who transition to the outsourcing provider.

Outsourcing is a solution for companies experiencing rapid growth, expansion into Russia or spin-offs from the parent company - where normally required resources are not readily available. Outsourcing is an alternative to building the needed capability from the ground-up.
5. Outsourcing services are available without interruption.
In contrast to a hired employee, an outsourcing company does not depart on leave, it does not take health time off etc. If an employee of an outsourcing company falls ill or takes leave, his work is momentarily passed to another executor of the same qualifications and level. Furthermore, outsourcing makes it possible to have an operating schedule as flexible as is necessary for the company-client, and the specific requirements of his business processes. Save on Benefits and Training Costs - You no longer have to worry about training and maintaining your accounting staff. Our staff are trained and supervised by us.

To get more information, please contact the BpoCom company at (+7 495) 797-1470 or send an e-mail request to:

5 key reasons to outsource

Is the Crisis Over?By Thomas D. Nastas

Make your costs smartBy Maxim Stepanov

1. Outsourcing permits improve company focus, free its capital and human resources for other purposes.

2. The possibility of quickly and effectively reacting to changes, constantly occurring on the market, and within the company itself.

3. The possibility to decrease expenses after converting the fixed expenditures into the temporary ones, while having simultaneously increased the quality of work performed.

4. Through using outsourcing, you get access to an extensive wealth of collective knowledge and experience, obtain resources not available internally.

5. Outsourcing services are available without interruption.

Business Process Outsourcing

Is the Crisis Over?
By Thomas D. Nastas

Make your costs smart
By Maxim Stepanov