Thinking about Outsourcing – Read this first

[vc_row][vc_column][vc_column_text]By Martin Conboy

All over the world Jobs are not just being outsourced, they are being replaced by self-service computer apps i.e. Travel apps, self-service banking apps, etc. and Robotic Process Automation.

The question is how much will automation impact the level of off-shored outsourcing and BPO? According to the Everest Group, North American companies believe automation gives them the ability to bring their work back on shore. A similar trend seems to be prevalent in the UK and Europe.

Automation reduces the advantages brought about by labour arbitrage, where software robots are even cheaper than wages in developing countries. (Global labour arbitrage is an economic phenomenon where, as a result of the removal of or disintegration of barriers to international tariffs, jobs move to nations where labour and the cost of doing business are relatively inexpensive and/or impoverished labour moves to nations with higher paying jobs.)

The ongoing Integration of a mix of live voice and digital channels will be hard to manage in terms of prioritization. The increased emphasis will be on the customer ‘experience’. Serious players are putting the customer at the center of their re-engineering efforts.

For those companies that are only beginning to outsource, or are unfamiliar with what it entails, misconceptions can occur which hinder what should, if done correctly, be a mutually beneficial relationship.

Outsourcing is set to really take off if it has not done so already, so it’s important for outsourcing myths and misconceptions to be discussed and for organisations to understand the potential business and financial benefits outsourcing and can bring.

Here are common misunderstandings for companies as they set out on their outsourcing journey for the first time.

 

Outsourcing is not a commodity

Outsourcing is not a set and forget play. It really does need to be managed by the parent company on a daily basis. Although many people view outsourcing as a way to reduce cost and improve efficiency, they neglect to consider other related costs, like moving a process from one location to another and keeping it in sync with the rest of the organisation. An outsourcing project is a living-breathing thing and it needs to be cared for. Sometimes, companies think that once they outsource a process, they can get rid of any involvement in it. An outsourcing project is more likely to fail if the parent company thinks that it has simply got rid of a pain point.

 

Outsourcing is only for big business

Outsourcing is becoming a lot more commonplace than you think! It used to be only thought of for larger companies, but these days it is cascading down to the SME level. These smaller companies are starting to understand the business benefits that outsourcing can bring. For example, small businesses can benefit from improved efficiency and flexibility in their organisation. Outsourcing can have a direct impact on businesses in various sizes.it is not just for larger organisations. One of the fastest growing areas for SMEs is bookkeeping and companies like Pacific Accounting and Business Services (www.pacificabs.com) are experiencing stellar growth.

 

Strategic Planning

Outsourcing teams might be commissioned at the beginning of a project or midway through the project. Whether they are there from the beginning, or brought in to help fix an ongoing glitch, they are part of the project’s strategy.  Both the organisation and the outsourcing vendor will have a strategy and both need to align these strategies at the beginning of the enterprise to ensure that they work together and optimise their offerings.

 

Left-hand does not talk to the right hand

If an organisation is outsourcing or commissioning a project for the first time, they might believe that the communication within the company or project will be disrupted. This doesn’t have to be the case. By discussing and deciding the chain of command and escalation pathway before the project begins, there won’t be a loss of communication within the organisation, as each team member will understand their individual and team role. A good outsourcing project will allow for an optimal working communication model that ensures adequate face time and collaboration through all aspects of the project. The executive decision-making and reporting process should be clearly outlined and documented at the beginning of any joint alliance.

 

Outsourcing does not need a contract; we can figure it out as we go along.

Because outsourcing can be complex it’s tempting to draft a contract that is totally buttoned down. The fact of the matter is that it is impossible to take all contingencies into account. Of course, you will need a solid contract with all of the KPIs considered, however, there needs to be some flexibility built in. After all, one does not know what one does not know. Things change and it’s much harder to get out of a rigid contract than one that’s got some leeway. It’s also a good idea to have a contract review every 12 months and make adjustments as required.

 

Our Culture will change

Some organisations might be concerned that their company culture will be changed if an outsourcing vendor is brought in. Company culture is vitally important in any organisation, so it’s crucial that it doesn’t change if new individuals or outside teams are introduced to the company or project. After all, to the outside world, they are representing your values and customer experience. Although disrupted company culture is a concern for some organisations, outsourcing vendors can adapt and even add to the company culture. This needs to be considered in the planning and implementation stage. Cross-cultural and soft skills consideration is not high on many companies checklist and it should be.

 

We are not them and they are not us

A concern for some organisations is that the company which is controlling the outsourcing project will have a conflict of interest with the outsourcing vendor. You entrust a process to an outside organisation, so it’s prudent to ask for a three-month trial for part of the process to see how it all turns out before you fully commit.  Then if that is successful you can expand the project. A basic rule of thumb is that everything that will happen in the life of a project will happen in the first 90 days. The role of an outsourced service provider is to offer and share their knowledge and expertise with the company and prove that they can in fact seamlessly become part of your culture.

 

Download infographic here. 

 

Martin Conboy

Martin is well recognised as one of the leading voices of the outsourcing industry and its role in facilitating outsourcing success throughout the Asia Pacific.  Martin was voted into the top five most influential and respected people in the global call centre outsourcing industry in November 2014.  Martin is an accomplished writer and public speaker and has delivered keynote addresses at BPO – ICT and Shared Services conferences in Australia, Bangladesh, China, Hong Kong, India, Korea, Malaysia, Mauritius, Middle East, The Philippines, Singapore, Thailand and USA.

Martin is a Director and shareholder of Virtual Property Manager a new and innovative business model for the Property Management space.[/vc_column_text][/vc_column][/vc_row]

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