Outsourcing is outmoded, enter the era of partnership

The new model for working with partners that offer unique technology, domain experience and inside knowledge across borders emphasises control and flexibility. Jonathan Sheard, Vice President, Sales at ESW shows how these two factors are complementary.

The traditional model of outsourcing is no longer working for brands who want to stay ahead. Historically, outsourcing meant restrictive contracts, with businesses ceding control over key processes to third-party providers. They were often locked into rigid agreements, with little flexibility to pivot when market conditions changed or when innovative technologies emerged. This outdated model limited scalability and adaptability, putting brands at a disadvantage.

It's no wonder that build-it-in-house has emerged as an option for brands that want to stay in full control. However, outsourcing has given way to partnering and has evolved into something more dynamic. Modern partnerships, especially in sectors like ecommerce and direct-to-consumer (DTC) businesses, are built on the principles of control and flexibility. These are no longer seen as opposing forces but as complementary elements of a robust business strategy. A key to this evolution is the rise of composable technology using tools that enable brands to have custom solutions tailored to their needs, without losing oversight of critical processes.

The limitations of the old model

The traditional outsourcing model often placed brands in a position of dependence. Contracts were drawn up in ways that restricted the ability to innovate or change service providers without significant cost and disruption. KPIs were narrowly defined, focusing on short-term efficiency over long-term strategic growth, which hampered innovation. Companies often felt like they had lost control of their operations, and were unable to respond at pace to market changes, customer demands or technological advancements. Ecommerce brands frequently found themselves unable to expand into new markets because their outsourced partners lacked the local expertise or technical capacity to scale.

Moreover, outsourcing was largely about reducing costs by handing over non-core operations to third parties, but this came at the expense of agility. The rigid structures inherent in these arrangements meant that partners could not easily accommodate shifts in strategy or emerging technologies, and brands were locked into the services they had signed up for, often for several years. This lack of flexibility could be very constricting in an industry where customer expectations and market dynamics change rapidly.

The modern partnering approach

The new partnering model turns this dynamic on its head, offering brands the ability to retain control while leveraging the unique technology, domain expertise and local market knowledge of their partners. This shift is particularly crucial for businesses looking to scale globally. For example, companies in ecommerce can now work with partners that offer global cross-border capabilities that allow them to quickly enter new markets without needing to invest heavily in building out infrastructure or local knowledge from scratch.

The new model is also about modularity, choosing what is needed when it’s needed. Brands no longer need to adopt a one-size-fits-all solution from a single provider. Instead, they can choose from a variety of solutions, based on different technologies, services and platforms that can be integrated into their existing operations. This allows businesses to remain agile and adapt quickly to changing customer expectations, new market opportunities and emerging technologies.

In this approach, partners bring both deep expertise and flexibility. For example, in ecommerce, partners provide solutions that are not only technologically advanced but also designed to scale across borders. They bring local market insights, including currency preferences, language localisation and regulatory compliance, all of which would take brands too long and require too much investment to develop independently.

This flexibility, paired with the ability to maintain control, is empowering brands to innovate and move at a speed that would have been impossible under the traditional outsourcing model. It also sees partners becoming an extension of the brand's in-house team, able to work so closely that they can respond more proactively than one would ever see under an outsourcing deal where help desk queries often sit in a long queue.

Composable solutions and agility

One of the significant benefits of this new model is how composable technology enables even greater flexibility. Customised solutions give brands the freedom to choose the specific technologies and services that meet their needs, rather than being forced into a monolithic platform that may include features they don’t want or need. The agility offered by composable solutions is especially crucial for ecommerce and omnichannel retail businesses. Companies can integrate different partners for logistics, payments, customer service and technology, creating a bespoke system tailored to their strategy.

Moreover, composable tools allow businesses to innovate without fear of disrupting operations. For instance, a brand can test a new ecommerce feature in one market using a specialised partner while keeping its core systems intact. This approach ensures businesses can experiment and iterate quickly, adjusting their strategies based on real-time feedback.

The evolution of partnering from a rigid, outsourcing-based model to a flexible, composable one has opened up new opportunities for brands. Businesses can now take advantage of the scalability, local market expertise and technological capabilities that partners bring, while retaining control over their core processes. In a globalised economy where consumer expectations are higher than ever, this new model of partnering is essential for brands that want to grow at home and across borders, and innovate while maintaining agility and oversight.