The Next Frontier for Outsourcing: Professional Service Outsourcing

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By Jacob Maslow

Hire or Outsource?The next time you visit your doctor, you might be surprised that a lot of the billing done for your medical bills, as well as the processing of the tests you took, are outsourced. We are not just talking about outsourcing across state lines or to the other side of the United States. We are talking about outsourcing to the other side of the planet. Similarly, when you talk to a lawyer, a lot of the materials your lawyer looks to for research are actually processed and analyzed increasingly in India. Welcome to the brave new world of professional service outsourcing.

It used to be that outsourcing was restricted primarily to grunt, time-intensive, low-scaled labor. Not anymore. In fact, high-dollar labor services, like certain types of legal work and medical analysis, are done in developing countries that specialize in outsourcing.

I am devoting a complete article on this phenomenon because this might be a good opportunity for your investment dollars. More and more outsourcing companies are moving away from low-cost, low-scale outsourcing services like data collection, encoding, and call center work to higher value premium outsourced services. This is called knowledge process outsourcing.

Just like with any other market, the higher the level of analysis, the more expensive the service is. This is the trend for global outsourcing. You might want to jump in while it is still in its formative years. Make no mistake about it. The practice of law in the United States is under tremendous change.

As universal healthcare becomes a reality in many developed countries, it is just a matter of time until universal healthcare reaches the United States. When this happens, there will be tremendous pressure put on reducing medical professional services. One key mechanism that will be utilized to make this happen is to use professional outsourced services.

Outsourced Medicine

Currently, there are a lot of outsourced medical services to India and the Philippines. The primary tasks being outsourced are usually pretty simple. We are talking about medical billing, double-checking medical records, and records management. Of course, the actual physical examination still has to be done by a physician in the United States.

Outsourced Legal Services

As insurance companies in the U.S. continue to drive down their structural costs, more and more companies are turning to offshore legal analysis outsourcing. This is restricted primarily to discovery and records management issues. Since the typical American lawyer charges anywhere from $400 and up per hour, it doesn’t make sense to pay that person to simply sift through paperwork. This is where outsourced legal services come in.

Discovery can be a very labor-intensive process. Using the cream-of-the-crop lawyers from developing countries like the Philippines, you can save up to 80% on legal discovery costs. A lot of the analysis is still done stateside, however. The analytical portion is crucial to winning cases and preventing lawsuits.

Outsourced High-Level Analysis

In the previous two knowledge process outsourcing tasks I described, the focus is usually on data gathering, low-level analysis, and data structuring. However, the trend in service outsourcing is now moving towards higher levels of analysis. We are talking about competitive research, big data analysis, and specialized billing. This is the trend outsourcing is going to.

It is no longer just a question of people picking up the phone, making phone calls, or receiving technical support inquiries. Outsourcing is fast evolving to higher and higher levels of analysis. It is only a matter of time until many high-paying medical and legal jobs in the United States are either partially or almost completely outsourced overseas. Personally speaking, I think this is a great idea because this unlocks a lot of value.

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