Outsourcing: what it is and how F2A does it

The technological transformations that have taken place in the last decades have led companies in the industrial sector first and then those engaged in other fields, to a real race for innovation. The growing need to reduce production times (and costs) and optimise the quality and performance of the product itself, have led companies to focus their energy on basic activities (core competences), looking externally for those specific skills required in other sectors.

Outsourcing is a concept of business organisation and economy that includes all the practices and strategies that a company implements when it delegates “non-core” activities to other entities external to it. The process presupposes the presence of two categories of subjects: the body that outsources (called outsourcer) and the one that receives the task of carrying out a specific task (outsource).

Outsourcing: what is the outsourcing of business processes

Outsourcing is one of the purely strategic phenomena that has experienced greater expansion in recent years, not only in Italy but also abroad. The mechanism that lies at the base of outsourcing requires that a company turn to external bodies to delegate to them the management of activities that do not directly involve the core business

In order to fully understand the outsourcing process, it is essential to distinguish company activities based on the level of strategic importance for the company, thus understanding which ones can be outsourced and which are not. It is possible to distinguish:

• Core activity: represent all those activities with a very high strategic value and which provide the skills and activities that allow the company to stand out from others, maturing and then maintaining a competitive advantage;
• Core related: identify activities that are closely related to strategic ones and, therefore, difficult to separate;
• Core distinct: they represent all those activities exclusively supporting core processes without having any relationship with it and, consequently, easily separable.

From a managerial point of view, the activities that are subject to outsourcing are those of support, since involving the core and related ones could entail significant imbalances at company level resulting from the dispersion of specific sectoral skills.

Outsourcing is a practice implemented by all those who decide to rely on this type of service based on the preliminary analysis of four aspects: the level of risk, the commitment of resources in relation to the skills of these, the potential of impact on the creation of surplus value for the company and the potential strategic value of the activity that is to be outsourced.

The advantages of outsourcing are numerous, but can be summarised in the following aspects:

• Reducing fixed costs: one of the main motivations for companies to outsource a process is the possibility of containing company costs in areas of activity considered to be non-strategic. In fact, outsourcing often allows a certain activity to be carried out at a lower cost than what would be managed by the business itself, being able to count on a higher quality level compared to that guaranteed by internal management, relying on the skills specialist of the outsourcer. The advantages in terms of costs extend over time thanks to the updating and the always qualified training of the professionals to whom the activity is outsourced.
• Concentrate company resources in strategic sectors: one of the strategic advantages lies in the opportunity to make profitable converge the personnel hired by the company in those activities that are considered fundamental for the company’s competitive success.
• Specificity and qualification:by turning to outsourcing services, it is possible to take advantage of specialists in that specific sector who not only possess training in the sector, but are also constantly updated on trends and innovations in their field.

In addition to the qualification of the personnel, the company that decides to outsource an activity has the opportunity to take advantage of a constant technological updating and cutting-edge solutions.

An interesting aspect of outsourcing is that outsourcing involves the creation of a real collaborative relationship between the outsource company and the outsourcer. In fact, the stipulation of the contract between the two parties provides not only a relationship of trust based on the recognition of mutual competencies, but also the involvement of the supplier in the medium and long-term development projects of the company.

Outsourcing services

As recent sector studies have shown, the type of activity entrusted to external suppliers is changing greatly, increasing the range of sectors in which there is higher demand. In particular, the main outsourcing services are:

• Finance and Administration (FAO): the main outsourced activities in this area concern the accounting, administrative, statutory and consolidated financial statements. The management of reporting, tax and corporate compliance is often related to these. Operational support in administrative processes, i.e. back-office, characterised by high transactional volumes with lower added value is frequently requested. Other areas of activity entrusted to third parties in the Finance and Administration area are specialist accounting consultancy and company credit management, including the recovery phase.
• HRO (Human Resource Outsourcing): even though human resources management is a field that historically has had outsourcing activity, in the last few years it has undergone a notable increase, thanks to the development of increasingly customisable service solutions.

• Logistics:this is one of the most important aspects in the development and creation of value of a company. Entrusting third parties to these activities allows companies to not only amortise costs on the materials used but to also focus on the production aspects. Managing the supply chain and transport independently has become a surplus value that companies are giving up less easily.

• Document management:this is a topic that has attracted public attention as it’s increasingly necessity to digitise paper. The management of paper documents is a necessity that all companies, from start-ups to multinationals have to manage, especially in regards to the management of physical space and online. To overcome this problem, numerous outsourcing solutions have been studied aimed at creating software and hardware to facilitate the management of the BackOffice.

Alongside these historical sectors, in which outsourcing has always been very successful, numerous requests are emerging in the areas of IT technology. In particular, the entrusting of information technology to third parties, with particular reference to the management of information and communication systems, involves undisputed competitive advantages for companies, which can take advantage of technologically advanced and often web based solutions, increasing the level of efficiency, productivity and quality.

Outsourcing: a few examples

Once the kind of activities that are used in external management by companies are understood, it is ideal to move on to some practical examples that allows us to understand the potential and the concrete advantages of outsourcing.

A first practical example can be made up of the companies that decide to outsource the management of the company canteen (universities, as it happens, in all the major Italian cities): in this way the companies confer to third parties not only the organisation of the spaces used for the canteen, but also the supply of meals (including any aspects related to logistics).

Going to more complex examples, it is appropriate to bring the example of some companies more structured that decide to outsource the management of accounting and administration in total: in this case the border between the provision of services and the birth of a real and its partnership is unstable. In fact, for this kind of activity, the team of experts usually deals not only with administrative management in its accounting aspects, but also in the processing of data for the preparation of financial statements and tax obligations.

Management software: with F2A, outsourcing becomes smart

F2A is a company born from the union, in 2006, of two major companies (FIS and Antex) active in the Italian outsourcing landscape since the early 60s and since its inception has directed all its energy into the development of a reality that offered an integrated outsourcing model. In fact, unlike other competitors, F2A provides a complete service that ranges from administrative management to that of staff: in this way the company that decides to outsource these activities will have as an advantage the possibility of having a single interlocutor, in addition to the professionalism and quality of services offered. The partnership that is established is therefore based not only on the esteem and recognition of each other’s skills and potential, but also on the desire to grow together, always achieving new and more ambitious goals.

The projects carried out by F2A are international and can count on teams of highly specialised professionals in the sector, constantly updated on the latest regulations and market trends. Thanks to continuous investments in research and development of commercial, strategic and above all technological collaborations, F2A is able to study the “tailor-made” solution that best suits the customer’s needs.

Those who decide to rely on F2A will be able to choose between one of the five models of process outsourcing. A first solution consists of the assistance service (both telematic and in-person) in which some members of the team, moving to the host company to replace missing resources, will contribute in terms of sharing know-how and proactivity in the development of projects.

Alternatively, it is possible to take advantage of consulting services (from work to administrative) or outsourcing services, which may involve specific activities and get to the real BPO (Business Process Outsourcing), which involves the transfer and the consequent organisation of an entire business process outside the company itself, including recruitment and transfer of personnel.

In addition to these first four types, F2A offers a SaaS service (Software as a Service) through which it provides its customers with IT solutions. In this way, the client has access to the information tools developed by the company via the web, controlling through a single portal numerous aspects of their business: from those related to staff administration (processing of payrolls and payslips, management of attendance and repayments expenditure) to those related to the management of resources (such as recruiting, training, skills development), going through the issues related to planning and control such as staff cost budgeting, reporting (on costs but also on absenteeism), holidays, permits, overtime, workforce, and much more.