Travel & Tour operators are talking a lot about outsourcing: Here are the ‘Top 8 reasons’ why outsourcing could be right for your business
For Tour Operators the decision to outsource core business functions is a vital strategic choice.
The specific factors driving the decision will depend on your business segment, financial position, stage of company’s development and the specifics of what you’re looking to outsource.
Open Destinations has been supporting Tour Operators and other travel industry players with core outsourcing services for over 20 years. Based on that experience, we’ve put together our ‘Top 8 reasons to outsource’. Could outsourcing be right for your travel business?
- Cost Savings
When Outsourcing works, it saves money. In addition to labour cost savings from outsourced staff resources working in lower cost regions, further savings are achieved though reduced requirement for office space, infrastructure, recruitment, training, and materials. Our experience in the travel sector has shown that a well-structured outsourcing engagement can save a client up to 50% of cost on a like for like basis. While cost reduction is clearly not the only reason to outsource, it is certainly a compelling one. At this level of saving every business should at least evaluate whether it is an option.
- Increase Efficiency & Quality
Back office tasks are often allocated to staff members or departments who have multiple tasks and priorities to manage. It’s no surprise that inefficiency can creep into a process as back office teams juggle competing tasks and priorities within a limited timeframe. By defining and documenting a process and allocating dedicated staff to perform the tasks, an Outsourcing engagement can drive efficiency and increase quality while reducing the administrative burden on a business. Analysing data from our clients in the travel industry suggests outsourcing can drive 20%+ increases in efficiency for tasks such as data maintenance. In addition to saving money, the right outsourcing solution can deliver efficiency and higher quality, cost effective outcomes.
- Freedom to Focus
Allocating back-office, non-strategic activities such as data loading, finance administration and software testing to an outsourcing partner can free up staff time to focus on what really matters to a business. Whether that is sales and marketing, business planning or speaking to customers and other stakeholders, outsourcing can help make sure you get the right people doing the right things. While this may not be as easy to measure as cost savings and process efficiency, a more effective organisation means motivated staff and happier clients.
- The HR Challenge
Outsourcing can help solve multiple HR challenges. Firstly, it may be difficult to recruit and maintain staff due to lack of available resources or high turnover of staff in certain roles. A dedicated outsourcing solution can address this challenge by taking responsibility for recruitment, training and retention. In many cases, an outsourced partner can find highly skilled and motivated individuals to allocate to a team, which a business may struggle to resource locally. In our Travel Outsourcing solution, we also take on staff management and day-to-day HR issues such as performance, salary and leave management. This helps ease the pressure on busy managers and HR teams.
- Managing Risk & Business Continuity
An outsourcing engagement can help a business diversify risk, sharing knowledge of process and systems with a trusted partner and ensuring there is no ‘single point of failure’. In the event of unplanned business interruption, an outsourcing team can offer geographic diversification and vital flexibility when it is needed most. During the global pandemic the travel industry experienced an unprecedented period of uncertainty. Our outsourced teams were able to offer customers flexibility, picking up new tasks such as refunds and cancellations. For larger companies, an outsourcing team can form part of a comprehensive business continuity plan providing back up and support for key business processes. Having a flexible workforce that can be scaled up and down is vital in today’s world.
- Think Global
In a global economy, the ability to deliver across multiple time zones and geographies is increasingly important. Outsourcing can support businesses who need to operate in 24×7 global economy through activities such as customer service and software support. Travel companies naturally have an international outlook and our team based in Goa, India has successfully supported clients around the world in countries including the UK, USA, Australia, South Africa, Sweden, Thailand and the UAE.
In an uncertain environment, the ability to build teams and scale rapidly will be a driver of success. Outsourcing can help businesses react to changing market dynamics, providing dedicated, cost-effective teams within a short time frame. At ODL our local network and established methodologies for the travel sector allow us to put new teams in place for clients within a four-week period. The ability to scale will be vital as the travel industry recovers from the global pandemic in 2021.
- Best Practice with Real-time Reporting
An experienced outsourcing provider will have worked with multiple customers in a niche market, developing methodologies and best practices, which can be applied to new engagements. Performance is reported in real time to maintain visibility, transparency and to continuously improve the service in collaboration with the customer. An outsourcing partner can share these best practices with its customers, helping to drive efficiency and improve quality in outsourced process. In this way, an outsourcing partner can be an unlikely but nonetheless valuable source of business innovation.
While this list is by no means exhaustive, it highlights the reasons to outsource we have come across over the last 20+ years of providing solutions to the travel industry. As travel companies emerge from the covid pandemic, outsourcing could be a key tool in helping you recover.
If you would like to find out how Open Destinations Travel Outsourcing can help your travel company recover, contact us:
Tel: +44 (0) 207 553 9220
Email: [email protected]