Companies are now looking for a whole range of capabilities from their outsourcing partners. They do not only want robots that will process their data, take calls and handle their SEO outsourcing projects. They want outsourcers who can be more involved in the business process and partners who know a lot of about the business they are in.
A study conducted by Forrester Research puts a lot of pressure on outsourcing companies who only offer cheap services, but do not really do “specialized” outsourcing. The focus is now changing, from cost and easy accessibility of employees to skills and specific job specialization. Companies prefer to work with outsourcers who already have qualified experts instead of having employees who need to be trained. This is why companies are now outsourcing to the Philippines instead of India and Pakistan. There are significantly more skilled experts in the Philippines who can handle IT outsourcing, for instance.
This is called the “time and materials” model because companies used to pay for the hours their team worked and the software, internet and phone connection and other miscellaneous materials the company needed to communicate with the team. They were not really paying for expert opinion, knowledge or skill sets. SEO outsourcing, for example, requires specific skills. Scrimping on the cost of paying SEO specialists and focusing only on the time and materials model will only mean low-grade work.
Companies are redefining the way they look at engagement and pricing models. Rather than transferring their IT services and overwhelming just one production center, they are now outsourcing to the Philippines, entrusting the job to a select group of highly skilled workers, instead of a whole army of people working at a lower cost. They want experts who can manage and help them develop new processes and create platforms where the processes are to be followed. They want people who can recommend the best software, follow the best business practices and create an extension of their main office, instead of being the donkeys that do the heavy lifting.
The time and materials model is slowly being pushed to the back row. The pricing models of this new phase in outsourcing are based on sharing the risks and the rewards of the business. It is more performance-based, emphasizing quality and expert work over sheer number. However, some companies may prefer to keep the model they have now, especially if it works for them. Companies outsourcing to the Philippines are shifting focus, though, and they want to be on top of their game by following the latest trends.