The Outsourcing Transition Strategy

On June 26, 2012, in Outsourcing, by Business Development Group
Even before the transition to outsourcing, a company needs to make a conscious effort to standardize its operating procedures especially those in business units that will be heavily affected by the outsourcing strategy. Standardizing operating procedures brings numerous benefits to the company, the most important of which is for benchmarking and for providing a set of standards for the vendor’s performance.

Standardizing operating procedures brings numerous benefits to the company, the most important of which is for benchmarking and for providing a set of standards for the vendor’s performance.

Many companies that have opted to outsource certain business processes have learned— often the hard way— that transitioning to outsourcing is complicated and costly. And, for many companies already struggling to stay afloat in today’s economy, a costly failure is simply not an option.

It is, therefore, essential to formulate a sound outsourcing transition strategy that allows for a smooth implementation and takes into account the essential elements to be considered in the creation of an outsourcing business model that works for the company’s current and future needs.

Related Article: Success Factors for Outsourcing: Know When and What to Outsource (Part 1)

Standardize Operating Procedures

Even before the transition to outsourcing, a company needs to make a conscious effort to standardize its operating procedures especially those in business units that will be heavily affected by the outsourcing strategy. Standardizing operating procedures brings numerous benefits to the company, the most important of which is for benchmarking and for providing a set of standards for the vendor’s performance.

Establish Key Transition Benchmarks

It is important to set key transition benchmarks before and during the outsourcing transition stage as this helps greatly in determining and stabilizing key results areas for long term adaptation and implementation. With the benchmarks established and monitored, this makes for easy reporting and tracking the progress and direction of the transition.

Related Article: Success Factors for Outsourcing: Establishing Proficient Teams and Effective Communication (Part 3)

Align both Retained and Outsourced Business Units

For the outsourcing strategy to work, it is essential to align all of the company’s business units – both the retained and the outsourced business units – to the set goals and objectives of the company. This can be done by defining and aligning the knowledge, skills, technologies, and tools used by both the retained business units and the outsourcing company.

Focus On Value More than Cost Reduction

As most experts would agree, focusing on value rather than the cost benefits of outsourcing is surefire way to optimize the outsourcing initiative. Collaborating with outsourcing enterprises, especially those that have long been in the industry, brings new ideas, innovative concepts, effective strategies, proactive approaches, and variable competencies that the client company can benefit from. Outsourcing has now become more than just a service output relationship; it’s now more on the exchange of knowledge and expertise to add value to the business. With the right focus on value, increased efficiencies and cost reduction will naturally happen.

Related Article: Extending the Business Value of Outsourcing

 

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Demand for Outsourcing Consultants Increasing

On June 22, 2012, in Outsourcing, by Business Development Group
Outsourcing consultancy services continue to be valuable to the outsourcing industry, especially in its role of connecting clients to the right vendors. And with the recent trends in outsourcing shaping consultancy into a much favorable deal, so has its demand increased.

Outsourcing consultancy services continue to be valuable to the outsourcing industry, especially in its role of connecting clients to the right vendors. And with the recent trends in outsourcing shaping consultancy into a much favorable deal, so has its demand increased.

In recent years, the outsourcing industry has seen shifting trends primarily due to the effects brought about by the economic downturn. Recent trends in outsourcing point to smaller and shorter deals being made, with the formerly large contracts that have come up for reletting being changed to less complex ones.

This shift has likewise influenced the outsourcing consulting industry. Where in better days— back to the times when corporate outsourcing contracts were large and more complex— consultancy talents “logged $300 an hour for the likes of IBM, TPI or EquaTerra”; in recent times, these same talents are now setting up shops as independent outsourcing consultants, offering the same consultancy services— providing expert outsourcing advice on RFPs, vendor selection, and contract negotiation— at as much as half the cost.

Related Article: IT Outsourcing Consultants: Same Advice, New Low Price

In their article, “Sourcing advisory bounces back… with half of today’s F&A BPO deals being advised”, Horses for Sources (HfS) pointed out that despite today’s “maturing and cautious market”, outsourcing advisers or consultants are in even greater demand with “half of the competitive F&A BPO engagements over the last year has an advisor stuck on them to get them to contract”.

Related Article: Sourcing advisory bounces back… with half of today’s F&A BPO deals being advised

The article went on to identify the reasons for this increased demand of outsourcing consultants. One of the reasons, of course, is the lower price for outsourcing consultancy services.

“… the consulting industry has found a way to adapt to keep itself relevant and much more price-friendly, while still being in a strong position to help clients deal with the sensitive and political task of outsourcing.”

Outsourcing consultancy services continue to be valuable to the outsourcing industry, especially in its role of connecting clients to the right vendors. And with the recent trends in outsourcing shaping consultancy into a much favourable deal, so has its demand increased.

Related Article: Outsourcing – Recent Trends To Watch Out For | Northernworx Blog

 

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