Daan van Heerden, director at Offshore Commercial, explains how innovation should be a key driver for growth and how outsourcing can help your Jersey business thrive.
“INNOVATION has to increase value and drive growth,” said Laura Furstenthal, a senior partner at McKinsey. This statement resonates deeply within the evolving landscape of business strategy, particularly in small economies like Jersey. In our quest for sustainable economic growth, innovation stands front and centre. Only through a willingness to change and flexible approaches to problem-solving do solutions like outsourcing emerge as strategic tools to unlock productivity and foster adaptation to new technologies and working practices.
The Challenge of Innovation
In a business context, innovation encompasses the conception, development, delivery and scaling of new offerings and models. However, while over 80% of executives prioritise it, less than 10% are satisfied with their organisation’s innovation performance. Many companies, particularly established ones, excel at operational efficiency but struggle to innovate beyond their comfort zones. The research by McKinsey underscores the performance benefits of mastering innovation. Companies which harness it experience economic profit 2.4 times higher than their competitors. Moreover, those investing in innovation during crises outperform their peers, highlighting its strategic significance in uncertain times.
Jersey’s Unique Challenges
Jersey’s economic landscape faces unique challenges, notably skill shortages and the imperative to embrace emerging technologies which makes innovation even more relevant locally. As the Strategy for Sustainable Economic Development states: “The challenge ahead of us is that as our largest cohort of Islanders reaches retirement age over the next ten to 15 years, a relatively small portion of people will enter the workforce.” This, coupled with the observation that “we know that we have skills gaps and labour shortages, despite having relatively high employment levels” highlights the need for innovative solutions. The only real solution is to look outside traditional recruitment practices, at which point outsourcing emerges as a key strategy to overcome these obstacles.
Enhancing Productivity Through Outsourcing
“Since 1998, overall productivity in Jersey has fallen by about 30%, meaning that each hour of work undertaken in the Island produces, on average, 30% less economic value than it did 20 years ago.” This quote is taken from the Strategy for Sustainable Economic Development. Put simply, there are fewer people available and they are able to deliver relatively less than they could historically. Outsourcing offers a solution:
Focus on core competencies: By delegating repetitive or specialised tasks, such as accounting and payroll, businesses can dedicate internal resources to strategic initiatives that drive their competitive advantage.
Reduced operational costs: Outsourcing can streamline operations, potentially leading to cost savings in areas such as staff costs, recruitment and training.
Increased scalability: Businesses can readily scale their operations up or down as needed by adjusting their outsourced services, ensuring agility in an evolving marketplace.
Addressing the Skills Gap Through Outsourcing
Early adopters (or trailblazers) have realised that Jersey faces a growing skills gap and have already harnessed outsourcing as a quick-to-implement, value-adding solution, allowing them to leverage talent from a wider pool, mitigating the impact of local shortfalls and ensuring access to specialised expertise that solves their problems. These skilled professionals bolt on to existing teams bringing fresh perspectives, best practices and innovative solutions, enriching the local workforce and contributing to industry growth. Today’s outsourcing models are more collaborative and strategic, offering additional value beyond simply providing manpower. Outsourcing itself is evolving and becoming more sophisticated in response to a growing need to outsource.
Managed services: This model goes beyond cost reduction and includes value-added services, such as expert support for specific business functions.
Operated services: This model focuses on driving innovation and outcomes through technology, data-driven insights and access to hard-to-source talent. These partnerships are highly collaborative, essentially extending the capabilities of the client organisation.
Facilitating Technology Adoption: Seize The Competitive Edge
“In 2022, 1.4 workers were needed to produce the same value of output produced by one worker in 1998,” says the Jersey Strategy for Sustainable Economic Development. Innovation is the cornerstone of a productive economy, driving growth and competitiveness. In a small island economy with limited resources, embracing technology is not just an option, it’s an imperative. Outsourcing partners can accelerate your technological transformation:
Operated services: Utilise automation, data-driven insights and leading technologies to optimise processes and deliver enhanced value.
Integration of AI and data analytics: Leverage expertise to gain deeper insights and make informed decisions, leading to improved performance.
Bridging the technology gap: Access cutting-edge solutions and expertise without significant upfront investments.
Staying ahead of the curve: Benefit from ongoing innovation and expertise offered by the outsourcing partner.
By embracing a strategic approach to outsourcing that aligns with the challenges and aspirations of the Strategy for Sustainable Economic Development, Jersey businesses can unlock significant value. Increased productivity, access to specialised skills and the ability to adapt to technology advancements are all within reach, ultimately contributing to a more vibrant and competitive Jersey economy.