Finding the right balance of what to outsource, what to keep in-house, and even what to insource is key to running an effective business. Bringing services back in-house can help create a more agile supply chain, increase reputational value and protect quality of service and product.
Let’s be straight. When it comes to managing your company’s assets, what problems do you encounter? Do you know how your assets are performing, how much are they costing you, where are they and even who’s using them and how? The answers to these questions are usually very different when outsourcing compared with managing in-house (insourcing).
In many organisations, physical assets are the foundation for success and future growth. The effective management of these assets (asset management) is essential to the overall success of organisations.
Around the world, hundreds of billions of pounds are spent on managing assets. However, along with monetary significance, the rising importance of asset management is being fuelled by factors such as whole asset life cycle, return on investment (ROI), total cost of ownership (TCO), health and safety and compliance set by regulating bodies.
With this in mind, the asset management outsourcing trend has shifted. Companies managing their assets are beginning to realise the benefits of insourcing compared with outsourced service arrangements.
“Right-sourcing, or finding the right balance of in-house maintenance services, outsourced services, and even insourcing, is the best way to stay competitive and cost-effective”
SO WHAT’S THE PROBLEM WITH OUTSOURCING?
The decision to outsource is a major strategic one for most companies, since it involves weighing the potential cost savings against the consequences of a loss in control over the product or service both internally to the operation and externally to customers.
Some of the major potential disadvantages to outsourcing include poor quality control, lack of meaningful data and information necessary for decision making, delayed supplier responses to client queries and issues, decreased company loyalty, a lengthy bid process and a loss of strategic alignment.
In particular, on the matter of cost control, there’s a “blackbox effect” since the nature of outsourcing arrangements can create a barrier in shared knowledge. This causes a lack of transparency and the ability to have full visibility and control of the costs of your assets. This can lead to problems in identifying where potential savings can be made.
In addition to this, problems with outsourcing arrangements usually lead to terminating or taking the outsourced services back in-house. The issue is that if you are outsourcing a range of business activities, if things go wrong with your service provider, it is much more difficult to re-insource as there is a dependency on the service provider to carry all your asset related activities. Is the risk worth taking? Probably not.
In light of this and with the development and increasing availability of smart asset management tools organisations can easily and affordably take back control of their assets in-house. This means the risks associated with outsourcing can be mitigated by managing them more effectively internally.
SMART ASSET MANAGEMENT TOOLS – THE NEW INSOURCING TREND
How times have changed. Outsourcing is no longer the answer for managing assets effectively. Outsourcing isn’t what it used to be and it certainly isn’t as profitable as it used to promise as a cost cutting exercise.
The rise of smart asset management tools has filled a void in the requirement for affordable and easy to deploy software that can be maintained and automated in-house delivering unrivalled results compared with outsourced suppliers.
Insourcing asset management activities will require you to be well equipped to take on the job. This can be costly if you are not using the right tools. Using smart asset management software can make a significant difference in cost compared with outsourcing. If you invest in powerful and easy to use tools, why outsource?
But while it is evident that there are numerous advantages from insourcing, there is a danger businesses are moving to this model for the wrong reasons – such as a mishandled outsourcing contract – rather than the organisation’s genuine ability to perform a superior service in-house. This often requires a business case proposal and the ability to demonstrate a worthwhile return on investment.
The insourcing trend now exists since smart asset management tools are aimed at specifically reducing asset running costs, improving safety and maximising operational efficiency. They remove the laborious time consuming tasks associated with managing assets by automating and collaborating in real-time with users and suppliers and provide an easy to use platform to achieve this.
‘The insourcing trend now exists since smart asset management tools are aimed at specifically reducing asset running costs, improving safety and maximising operational efficiency’.
Some of the rich features they offer are accessibility anywhere, anytime accompanied by using mobile apps. All asset information is stored and consolidated into a single database to manage, locate and report on all your assets, in a user-friendly and easy way.
The use of alerts and notifications are a great monitoring tool. These are used to control tasks and guide employees through business processes. This is also achieved using workflows to ensure work is followed through from initiation to completion. This provides transparency across the business and helps to collaborate all the stakeholders into one common platform.
Finally, smart solutions increasingly use IoT/big data technologies to provide the capability to collect data from sensors embedded into physical assets. This allows to get real-time information about the usage of assets in order to take the right actions, control costs and improve service to end-users.
REAPING THE BENEFITS OF THE NEW INSOURCING TREND
One of the major downfalls with outsourcing is the lack in quality of service and the failure to meet client expectations. In an ever-changing environment businesses need to adapt and improve operational efficiency to be profitable and competitive.
‘If you want a job done properly, do it yourself!’
For example, if you own or run a fleet of vehicles and equipment, outsourcing this requirement would make it more challenging to influence culture and improve driver behaviour.
We believe this can be best achieved organically in-house. This is a very important part of asset management and the ability to change attitudes in the use of assets since this is safety related.
The benefits to insourcing and managing your assets and users in-house is far reaching and invaluable to businesses. The actual investment involved in implementing smart asset management tools pays for itself usually within 4-6 months.
SO WHY MAKE THE SWITCH?
The number of reasons and justifications to in-sourcing completely outway the dying trend of outsourcing your asset management functions. Businesses today need to be in full control of the assets they operate.
By embracing the insourcing trend with the power at your fingertips at a click of a button, you can take full control and unlock the hidden secrets of your assets and make those all important savings.
What problems do you face with your asset/fleet management outsourcing arrangements? And what is your view on the current trend in insourcing using smart tools?