A recent Credit Union Times column asks the important question “Is Operational Outsourcing Worth A Second Look?”
It’s a good question considering that credit unions have traditionally resisted outsourcing key business functions. However, due to a “tsunami” of operational challenges and increased margin pressures that have reshaped the competitive landscape, outsourcing is proving to be a smart business decision for many credit unions.
Credit Unions that haven’t entered into a relationship with a Business Process Outsourcer (BPO) should consider the following impacts outsourcing could have on their business:
- Strategic Impact: While you’ll still maintain control over outsourced functions to ensure that they align with your strategic objectives, you’ll be able to continue doing what made you successful in the first place…focus on your core business.
- Business Impact: The right BPO will be a champion of flexibility and agility, offering custom and innovative solutions that address and improve a known business need within your organization.
- Financial Impact: While cost is no longer the primary driver for most businesses that outsource, it remains an important benefit. You should expect reductions in both fixed and variable costs, most notably IT and labor.
- Relevant Knowledge: The right BPO will have “walked in your shoes.” In other words, they’ll bring years of experience within your industry to the table. Instead of a drawn-out learning curve, they’ll offer advice and solutions based on that experience…right out of the gate.
- Scalability: Many companies in hyper-growth modes choose to partner with a BPO, and for good reason. Building out entire internal teams or adding new functions and capabilities is a costly and arduous process, at best. Outsourcing will allow you to drive continued growth faster and with lower costs.
- Transparency: It is imperative that companies understand all risks related to their reputation, finance and operations during a transition to outsourcing. The right BPO will operate with full transparency so that you understand these risks and work together to mitigate them.
At Servicing Solutions, we manage and implement the loan servicing, customer care, collections, and augmented staffing functions for many financial institutions, including credit unions. Our clients still maintain control and ownership of these functions but rely on our partnership and experience to implement strategies that work best for their individual customer/member base.
Highly respected Deloitte has taken note of the many benefits provided by outsourcing and commented:
“Organizations are recognizing that disruptive solutions can revolutionize the way they do business, and that buying capabilities in the marketplace is generally faster and more scalable than developing capabilities internally. Outsourcing is about collaborating with partners in the marketplace to integrate services an organization cannot quickly build on its own to innovate, transform, propel its growth, and unnerve its competitors.”
Ready to learn more about how outsourcing can help your credit union innovate, save money, and unnerve competitors? Drop us a line at firstname.lastname@example.org.