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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1 Response » to “The Outsourcing Transition Strategy”

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