Finding the balance between outsourcing and in-house expertise is crucial for modern businesses, according to Blur Group chief executive and founder Philip Letts.
Letts founded the online marketplace for business services in 2007. It has 60,000 businesses on its platform across 145 countries and has now launched a ‘Size Zero Enterprise’ campaign to encourage businesses to think differently about how they operate and resource. “With all the technology and economic change that we’ve seen, businesses are changing,” says Letts, who is writing a book on that change.
He argues that certain knowledge workers and services are increasingly in demand and hard to recruit. Using them on an outsourced basis allows businesses to access people and services they may not otherwise be able to afford. In turn this frees them up to focus on their core business.
“It’s recognising that you can’t do it all in-house. The sophisticated knowledge workers that you need are scarce resources and the risk is that they may get scarcer over time. Nine times out of ten, innovation doesn’t come from within,” he says.
As technology has made the world smaller, businesses looking beyond their local environment for partner and suppliers. Almost all of the transactions on Blur Group’s platform are between businesses that have not worked together before and around 70% of new relationships are conducted exclusively online, with no face to face meetings occurring. “We have broken the myth that companies are more likely to work with local service providers,” says Letts. “Only about 10% of relationships are with partners that are local.”
This global approach doesn’t take months to set up either – most partnerships are agreed in a couple of weeks.
Letts believes these kind of services are changing outsourcing, making it more agile and less onerous. “You’re outsourcing project by project rather than just taking a whole chunk of your business and outsourcing it to one provider like in the 1980s and 1990s.”
The trend is yet another move away from traditional office hours and face to face ways of operating. However, businesses and line managers need different skills in this new world. Letts says they need to be very comfortable with new technologies and recognise that ‘nine to five’ has less relevance when providers are scattered around the world and different time zones.
Instead of being given a project to deliver, managers may now be asked to co-ordinate many more projects with a light touch. They need project management skills and different ways of thinking and working. “We have to work in parallel now when we used to work in sequence,” adds Letts.
He estimates that only 10% of European companies are working in this flexible way, in comparison with around a quarter of US businesses. “The US has been much more technologically literate for longer. It’s almost culturally unacceptable not to be very tech savvy in your business life. In Europe it is okay to be that way, which has worrying implications.”
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