Blended Outsourcing: Enhancing Business Efficiency and Innovation
Since the market changes fast and companies need to adapt to changes faster than ever, strategies need to enhance efficiency, drive innovation, and maintain competitive edges. Outsourcing has been around for quite some time and is one strategy to get qualified staff at a lower cost. However, disadvantages include reduced in-house knowledge, cultural challenges, communication problems, time differences, dependence on suppliers and reduced control. To resolve these challenges, one practical approach that has gained prominence is blended outsourcing. This model merges the strengths of internal and external teams, creating a synergistic partnership that can lead to remarkable business outcomes.
We have a long-term partnership with Epical Group in Sweden, with whom we jointly offer blended outsourcing to clients in Sweden. In the UK, we have worked with a few partners on demand.
The Concept of Blended Outsourcing
Blended outsourcing, which is also called Distributed Development, is a strategic model that involves collaborating with an outsourcing partner while maintaining an active role for the in-house team. Unlike traditional outsourcing, where complete project responsibilities are handed off to an offshore party, blended outsourcing ensures that the team comprises some local native people who work near the end customer and collaborate with other team members located in the offshore outsourcing company. This collaboration allows for a more integrated approach, combining both groups’ unique strengths and insights.
Advantages of Blended Outsourcing
Enhanced Skill Access and Flexibility: Blended outsourcing allows companies to access a broader skill set without the long-term commitments associated with hiring full-time specialists. For instance, if a project requires niche skills or advanced technologies, these can be sourced from the outsourcing partner, filling gaps in the in-house team’s capabilities.
Cost Efficiency: Organisations can optimize costs by combining the efforts of internal and external teams. This is particularly significant in regions with high labour costs, as outsourcing certain operations to countries with lower operational costs can lead to substantial savings while still maintaining high-quality outputs.
Risk Mitigation: Blended outsourcing distributes the risks associated with project development. With both internal and external teams sharing responsibilities, risks related to project complexities, technology updates, and compliance standards are better managed.
Scalability and Innovation: Outsourcing partners often bring new perspectives and innovative solutions driven by their experience across various industries. This can be invaluable for in-house teams looking to implement cutting-edge solutions or scale operations rapidly without compromising quality.
Implementing Blended Outsourcing
To effectively implement blended outsourcing, a structured approach is essential:
1. Strategic Planning: Define clear objectives and outcomes expected from the blended outsourcing arrangement. Understanding what each party brings to the table helps align goals and set realistic expectations.
2. Partner Selection: Choosing the right outsourcing partner is crucial. The partner should have the requisite expertise and a robust understanding of the industry’s standards and challenges. For instance, at Gislen Software, our collaboration with Epical has been instrumental in blending expertise for enhanced project outcomes.
3. Integration and Workflow Design: Design workflows that seamlessly integrate the processes of both teams. This might involve using collaborative tools, regular meetings, and integrated project management systems.
4. Continuous Communication: Regular and open communication is vital to synchronise efforts and align strategies. Both teams should be encouraged to share insights, progress updates, and constructive feedback.
5. Performance Monitoring and Adaptation: Regularly monitor the outsourcing arrangement’s performance and be prepared to make adjustments as necessary. Performance metrics should be established from the outset to measure efficiency and effectiveness.
Case Study: Successful Implementation
In the case of Gislen Software, our blended outsourcing model with Epical Group has demonstrated over more than 10 years how practical this approach can be. By leveraging Epical’s technological prowess and our in-depth understanding of local market dynamics, we have enhanced service delivery for high-profile clients such as ABB, PostNord, Scandinavian Airlines, Swedish Match, and Volvo Car, optimising costs and operational efficiency.
Conclusion
Blended outsourcing represents a strategic evolution in how companies manage their resources in the digital age. By effectively combining the strengths of an in-house or local team with those of external experts, companies enhance their capabilities and foster a culture of continuous improvement and innovation. As businesses navigate complex markets and technological advancements, adopting a blended outsourcing model might be the key to staying ahead in the competitive curve. Contact us to discuss how we can help you with strategic blended outsourcing!
What is blended outsourcing?
Blended outsourcing (also called Distributed Development) is a model where an outsourcing partner works together with an in-house team that stays actively involved. Instead of handing off full responsibility offshore, the team includes local, native people working close to the end customer, collaborating with offshore team members. This creates a more integrated way of delivering work by combining strengths from both sides.
How is blended outsourcing different from traditional outsourcing?
Traditional outsourcing often transfers full project responsibility to an offshore party. Blended outsourcing keeps an active in-house role and adds a local team near the end customer, working closely with the offshore outsourcing company. The difference is tighter integration, more shared ownership, and a setup designed to reduce typical outsourcing downsides like communication gaps and loss of in-house knowledge.
What problems with outsourcing is blended outsourcing meant to solve?
Common outsourcing disadvantages mentioned include reduced in-house knowledge, cultural challenges, communication problems, time differences, dependence on suppliers, and reduced control. Blended outsourcing is presented as a practical approach to address these by merging internal and external teams into a coordinated partnership, rather than separating responsibilities completely.
What are the main benefits of blended outsourcing?
Blended outsourcing is described as improving efficiency, supporting innovation, and keeping a competitive edge by combining internal and external teams. Key benefits listed are better access to skills and flexibility, cost efficiency, risk mitigation, and the ability to scale and bring in new perspectives. The goal is to strengthen outcomes without losing the advantages of an engaged in-house team.
How does blended outsourcing improve access to skills and flexibility?
It lets companies access a broader skill set without long-term commitments to hiring full-time specialists. If a project needs niche skills or advanced technologies, those capabilities can be sourced from the outsourcing partner to fill gaps in the in-house team. This makes it easier to respond to fast market changes and shifting project needs.
How does blended outsourcing support cost efficiency without sacrificing quality?
Cost efficiency comes from combining internal and external efforts and outsourcing some operations to countries with lower operational costs—especially relevant where local labor costs are high. The model is framed as a way to optimize spending while maintaining high-quality outputs, because the in-house/local team remains involved and responsibilities are shared.
How does blended outsourcing help reduce project risk?
Risk mitigation is described as a result of distributing responsibility across internal and external teams. With both sides involved, risks connected to project complexity, technology updates, and compliance standards can be managed more effectively than when everything is handed off. Shared ownership is positioned as a practical way to control uncertainty.
Why can blended outsourcing increase scalability and innovation?
Outsourcing partners often bring new perspectives and innovative solutions from experience across industries. That input can help in-house teams implement cutting-edge solutions or scale operations quickly without compromising quality. The model is positioned as a way to expand capacity while keeping alignment through integration and communication.
What are the key steps to implement blended outsourcing successfully?
A structured approach is recommended: define clear objectives (Strategic Planning), select the right partner (Partner Selection), design integrated workflows (Integration and Workflow Design), maintain regular open communication (Continuous Communication), and monitor performance and adjust (Performance Monitoring and Adaptation). The emphasis is on alignment, integration, and measurable outcomes from the start.
What should you look for when selecting a blended outsourcing partner?
The partner should have the required expertise and a robust understanding of industry standards and challenges. Partner fit is described as crucial because blended outsourcing depends on collaboration, integration, and shared responsibilities. The text points to Gislen Software’s collaboration with Epical Group as an example of blending expertise for better outcomes.
What is Gislen Software’s role in blended outsourcing with Epical Group?
Gislen Software states it has a long-term partnership with Epical Group in Sweden, offering blended outsourcing jointly to clients in Sweden. In the case study, the model is described as combining Epical’s technological strength with Gislen’s understanding of local market dynamics. Together, they report enhancing service delivery and improving cost and operational efficiency for clients.
Which clients are mentioned as examples in the blended outsourcing case study?
The case study names ABB, PostNord, Scandinavian Airlines, Swedish Match, and Volvo Car as high-profile clients served through the blended outsourcing model with Epical Group. The example is used to show how combining local market understanding and technological capability can support service delivery and efficiency over a long-term collaboration.