Gone are the days when business owners and managers established huge buildings and carried all business processes in-house. Since today, we believe in the philosophy of ‘customer is the king,’ business organizations are also on the lookout for doing quality work at an affordable rate. Thanks to globalization and the widespread use of the Internet, the resource market is no longer limited to the geographical boundaries of a country. Nowadays, a company can have headquarters in United States, carry out production in China, and manage customer care services from India. All these developments come under the term ‘7 steps to successful outsourcing.’
Essentially, successful outsourcing is a practice where companies contract out some of their tasks and operations to third parties that specialize in the same. Outsourcing has two types — offshore outsourcing and onshore outsourcing. While offshore outsourcing refers to hiring service providers in far-away countries operating in different time zones, onshore outsourcing involves contracting out tasks within the same country. Some common services include; information technology services, customer care services, manufacturing processes, and so on.
The primary reason behind the popularity of outsourcing is that it allows the senior staff of a company to focus on more pressing issues by assigning routine tasks to third parties. It also helps them in freeing up personal resources for other purposes and reduces both operational and employment costs. At the same time, companies can easily benefit from the global talent and world-class capabilities. In short, it saves their time, costs and also ensures high quality work.
Outsourcing does sound like a win-win situation, right? Although it comes with many benefits, very few companies successfully manage to reap them. This is because outsourcing has a significant impact on the overall functioning and the organization of business houses. It surely helps them grow and diversify, but it can also lead to ugly disputes and heavy losses if not taken care of properly.
Here are the 7 steps to successful outsourcing that will help you in planning and managing your outsourcing services efficiently.
Most companies outsource tasks associated with:
When considering what to outsource, you must differentiate between your company’s core activities and routine activities. Do not outsource tasks and processes that are key to your organization. Instead, you should contract out other activities that do not require constant vigilance and can be best carried out by others.
Another factor that can help you in making a better decision in this regard is an evaluation of the current infrastructure. Do a careful assessment of the present business performance, cost savings, internal and external capabilities, service performance, etc. If the loopholes found can be addressed by upgrading the current infrastructure effectively and efficiently, then you may not be in urgent need of outsourcing. But if the problems cannot be solved in-house, outsource them to agencies that specialize in the concerned areas.
Outsourcing is not a short-term project. On average most outsourcing contracts are applicable for three to five years. If the association remains healthy for all parties involved, the contract period can also be extended. But before extending the term of outsourcing contracts, you must evaluate whether you are getting the expected results or not. You must regularly measure the performance of your offshore operations, find gaps, and establish ways to fill them. Continuous training and education of employees are important. You must also upgrade current technologies and processes and always remain open to innovations.