The economic meltdown has been a blessing to outsourcing. The bystanders among the enterprises are now leaping onto the outsourcing bandwagon as they come to grips with the crisis. According to one estimate, more than 10% of mid-to-large enterprises are moving into application and business process outsourcing engagements for the first time.
Over 40% of existing experimenters (those who have partially outsourced) are adding more functions to the list.
Welcome to the party! If you are here to save costs, this is for you.
There are plenty of sites, articles and blogs available on providing tips on how to avoid sourcing disasters. They give you nice advice, but rarely go into details. Having trawled through most of them, and having sat through a number of post mortem sessions, there is one advice which I would like to offer to you:
There are three activities that would make your initiative a success. And they are:
• Planning, planning, planning
• Defining, defining, defining,
• Managing, managing, managing.
There can never be too much of these.
Cost is the driving force; but not the only force to reckon. Over-indulgence on cost-saving has, historically, not helped. If you are outsourcing for the first time, cost-savings hold good only for a very short time. Do include cost saving in your strategy for outsourcing; but don’t build your business case around it.
It pays to be conservative during your selection process. Sales visits can be ‘stage-managed’ and may not reflect the future. Don’t go by what your vendors tell you – we have heard enough tales of ‘low hanging fruits’ being sour! It is YOUR business, and hence YOUR and ONLY YOUR decision on the sequence of outsourcing. Obviously, it helps to get an external, independent perspective on your decision. Selection is the key stage in your sourcing cycle – a faulty selection can lead to strained relationships, misaligned strategies, loss of reputation and performance degrade.
If you are with me so far, let me warn you. The process has just begun. Hastily conceived and poorly managed transition have led to significant delays and cost over-runs. The process which you have just outsourced continues to remain YOUR processes, YOUR business. Invest in building solid processes and an offshore management framework to integrate the staff into your global organisation will go a long way to rich rewards.
Quite often outsourced processes become ‘out-of-sight; out-of-mind’. It no longer remains your ‘headache’. True? FALSE. By outsourcing, you have just compounded the management of those processes – they are very much your headache. Unless, you invest in a thought-through governance of the relationship, the headaches will very soon turn into migraines.
The idea of this blog is not to scare you off outsourcing. If you are in the process of selection, or thinking about it, we would like you to appreciate that entering into an outsourcing engagement is not a decision that should be hurried. The result of hurried decisions can be both costly and painful, with multiple ramifications on job security and company overhead. Having advises a number of clients in defining strategy, evaluating, selecting and managing their sourcing options; we recognise that outsourcing is NOT always the best right option. We believe in choosing the right partner, in the right model at the right location through a proven structured process.
