Outsourcing seems to be the hottest buzzword - a popular shortcut to cost cutting.
Many organisations fancy it as an easy escape route to reduce expenses by getting the work done as cheaply as possible.
But, if you feel that way and simply concentrate on the cost-benefit, you may only end up saddled with poor results.
This is because outsourcing often does not work like we want it to. In fact, many horror stories are emerging thanks to managers focussing solely on the cost variable.
Well, you have to look beyond the larger picture and not make cost cutting or getting cheap labour the only motivation for outsourcing.
The real reason for outsourcing lies in the quest for finding people who can do the work better than you can! Operating with this mindset of tapping into a larger talent pool alone can open up a world of new opportunities for companies both large and small. Like:
• Outsourcing delivers rich gains from the expertise and experience of specialists leading to better quality results and lesser mistakes i.e., maximum efficiency. You can also leverage the access to new and expensive technologies.
• Hiring experts to do your work not only helps you to exploit their proficiency but also saves time as they can obviously do the work much faster than you ever could. For instance, you no longer need to spend hours over your accounting – simply outsource it to an expert who can do it in a jiffy!
• You can now concentrate your time and resources on the core priorities and strategic initiatives so as to manage the business efficiently. Sans the stress of peripheral problems, you are free to enhance what you do best or what needs your attention most, leading to higher profits.
• This is not to say that outsourcing will not reduce your operating costs. You stand to gain a lot from the lower service expenses and are saved the need to set up extra infrastructure.
This is also a flexible option as you can pay for the services only when you need them vis-À-vis maintaining large, full-time staff in-house.
But, the key is to look at cost saving as a desirable offshoot of outsourcing and not let it become the primary focal point.
In fact, according to Gartner, “Saving money isn’t the only reason to outsource. It’s not even the top one these days!”
Getting it right: It’s easy to want to outsource – the challenging part is how to do it.
The dilemma begins with what to outsource. While outsourcing can be used in a variety of ways in different industries and sectors ranging from IT, data entry, back office and customer support to recruitment, payroll, employee training and even manufacturing.
Yet, not every application can be outsourced. You have to select a viable one based on size, complexity, stability, resources, skills or technology required. And, needless to say, none of the core functions can ever be outsourced! Stick to routine, non-core jobs that are either temporary or cause a heavy drain on resources.
Now comes the prudent selection of a suitable service provider.
Do your homework to choose the right outsourcing partner from a list of choices. Try to find out everything about the provider and then handle the impending process carefully.
Sit down and determine the minute details together like scope of work, time frame, performance indicators, quality assurance and reporting relationship. These standards of performance should be clearly outlined in the contract at the outset itself. Also, it is always advisable to retain the decision-making authority.
In addition, as Sun Services vice president and CTO, Dan Berg elucidates “The way to do it is looking at the existing process and its related outcomes and then asking the outsourcing partner how they would achieve the same or better outcome by leveraging their own established processes and best practices. The combination of process definition and process execution is crucial.”
Once the outsourcing arrangement is underway, be patient and allow for initial hiccups as the provider tries to familiarise with the work. Also, maintain constant communication with regular meetings where you are both updated of the progress and can also discuss any issues.
All said and done, the success and effectiveness of the collaboration will depend on your individual relationship.
So, try to establish a working partnership that is compatible, satisfactory and based on a mutual understanding of needs. This will turn outsourcing into a strategic tool that enhances both productivity and profitability.
PAYAL CHANANIA
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