Outsourcing might not be for everyone...but it certainly is a viable solution to a lot of the problems companies face. Bigger corporations have embraced outsourcing for a long time...but it the smaller and midsize company where it can really make a difference.
In today's age corporations have become fairly used to outsource certain non mission critical tasks associated with running a business. There is hardly a corporation left which still processes their own payroll or computes their own tax returns.
Yet, despite the widespread adoption of outsourcing those non critical tasks the willingness to outsource more mission critical tasks is often times not there. This is not necessarily a good thing.
There is ample evidence that smaller or midsize companies which have embraced a coherent outsourcing strategy are significantly more successful in the marketplace than companies who do not engage in any BPO or KPO strategy.
When reviewing how companies succeed in their outsourcing strategy it becomes obvious that there a are certain key steps or traits these companies share.
#1
Only outsource those business processes which are not central to your business. Stick to secondary processes. In simple terms...when you are an engineering company...do not outsource engineering. Outsource website design and maintenance, customer outreach, marketing, acquisition and so on,,,
#2
Pick The Right Partner and Do Your Research
Try to find the right partner seems rather logical..yet it often times where the effort falls flat. Try to find a provider who has experience related to your industry, Get references and if possible..find a company with a presence in your time zone. It will make things easier over the long run.
#3
Work Closely With Your Provider
This is perhaps the most important piece of advice. The more closely you interact with your provider, in particular in the beginning, the better your new partner will understand what you are trying to accomplish. The learning curve will be shorter and consequently your efforts will pay off quicker. There is a multiplier effect applicable to a successful outsourcing relationship...you put in an extra 20 hours training your outsourcing staff in the beginning...you will save an additional 60 hours later on.
#4
Set Up Verifiable Key Performance Indicators (KPIs)
Seems simple but it will make sure that your outsourcing provider stays on track and mission. (and you too) Allocate number of hours towards a process and define the expected results. By having hard KPI's you share with the provider everyone in the chain becomes accountable.
#5
Own The relationship, Manage It Properly
It is a hard truth that when an outsourcing relationship goes off the rail it is usually because no one really owned the relationship. Companies often times fail to identify a key person responsible for the success of the relationship. Consequently there is no one who works daily to make it better and helps it to succeed. Do not treat it as a secondary (second class) channel within your organization. Give it a real status.
#6
Innovate and Improve
True efficiency gain is never just one step. Efficiency gains are most often realized by implementing incremental improvements which collectively make it better. Try to look at your outsourcing relationship on a regular basis aiming to identify operational weaknesses. Improve upon those deficiencies bit by bit. Over time this will lead to significant improvements in your KPI's...making the outsourcing relationship a success.
Final Words:
Business Process Outsourcing (BPO) can turbo charge your operation when done right. It will give a corporation more flexibility and convert capex dollars into opex spent. Additionally the organization gains knowledge and expertise outside its core business which will make it more successful overall.
Perhaps most importantly...overall costs will decrease, raising shareholder value and making the business more valuable to its owners.