Outsourcing for business sustainability — A Straits Times interview with CEO Chio Kian Huat

The Straits Times interviewed Mr Chio for his views on how outsourcing may be deployed to meet some challenges businesses are facing today, and for long-term business sustainability.

What challenges do firms face where efficiency and sustainability are concerned?
With rising business costs and the manpower crunch impacting top and bottom lines, companies are under increasing pressure to improve productivity, especially when traditional business models are challenged.

This is aggravated by the skill sets of the workforce, which may no longer support the new business models.

Companies expanding overseas, which are not familiar with local rules and regulations, may spend much time and money navigating on their own, only to face roadblocks and delays in their journeys.

Some SMEs, probably encouraged by government incentives to adopt automation tools, realise after the purchases that their staff did not know how to use the tools properly. Or they try to fit a square peg in a round hole for ‘productivity’ when proper due diligence and thorough needs analysis were not conducted before the purchase.

Another issue is businesses that see outsourcing providers as ‘cheap contractors’ may not end up deriving the best from their outsourced partner’s expertise to raise productivity meaningfully.

Can outsourcing make a difference to the sustainability of businesses? Please elaborate.
Outsourcing frees businesses from non-core activities so they can focus on what they do best and on value-added tasks that can give them better margins.

Outsourcing to compliance professionals (such as payroll or corporate secretarial agents) will give firms peace of mind to focus on their business. The risk of non-compliance, which results in penalties, is also reduced, as businesses need not be encumbered by various regulations or feel compelled to have to keep up with ever-changing rules and regulations.

From an HR perspective, outsourcing frees your staff from mundane and routine tasks. Businesses can engage their staff in more meaningful work with development opportunities, which in turn can help in staff retention to help the business grow in the long term.

Any tips for other companies out there that have not started on outsourcing?
Businesses can turn to outsourcing for long-term efficiency and sustainability, especially for functions that are not core to their expertise such as accounting, payroll, IT, and statutory compliance.

Those facing manpower issues in staff retention or skills mismatch should also think about outsourcing rather than wait until it is too late. We have encountered businesses with backlogs or messy accounts, which have turned to us for critical help only because they need to submit their accounts for loan applications or to the authorities. The right outsourced party, if used correctly, can be a reliable and trusted partner to your business growth.

A detailed and properly executed arrangement for outsourcing is therefore important.

Select your outsourced party carefully, choosing experts with the domain knowledge, track record, right qualifications and expertise, and systems in place to do the work, and with continuous training and development to train and keep their people abreast of developments in their fields. These are partners that will invest for the long haul, and are hence most suited to be your outsourced partners.

The article from the interview was published in the Straits Times Special’s Business Sustainability article ‘Keeping Businesses Going’, 20 July 2016.