Business efficiency has been one of the most important aspects for business success since the growth of global competition between companies is continuously increasing. As a result, companies are trying to make their products/services in the most productive and effective way by narrowing down their field of business to the so-called core-business. One of the ways that has been successful so far is through Outsourcing, which in other words is passing some or all activities performed internally in the company to an external party.
According to Deloitte’s “2014 Global Outsourcing Report,” outsourcing growth is expected to continue at rates of 12%-26% across multiple functions. The industry that utilises outsourcing the most still continues to be IT, with nearly 60% penetration.
Many large corporations such as IBM, Apple, Microsoft and other companies outsource their services to different countries around the world, because outsourcing is an opportunity to add value, tap into a resource base and/or mitigate risk. Moreover, outsourcing can help companies to:
- Reduce Cost
- Increase efficiency
- Focus on core areas
- Save on infrastructure ad technology
- Enable risk-sharing opportunities
- Access to effective resources
These opportunities also bring potential risk covering legal issues, hidden costs, security, continuity, and above all financial risk. However, our team at Parker Solutions Group has come up with 5 key elements that will ensure you achieve the benefits of outsourcing whilst keeping all such associated risks under control.
1. Know your needs – Which services/functions to outsource
When deciding to outsource services or functions, the organisation should be clear and concise about the company needs, policies, benchmarks and long-term goals. Outsourcing is a long-term management strategy that aims to cut costs and bring effective services over a long period of time. Therefore, it is more productive to outsource those regulatory approval functions that are resource intensive, or need a high level of expertise. Make sure to develop a contract that specifies the scope of the activities that should be outsourced, targets, and clearly specifies the roles and responsibilities of the customer and supplier.
2. Find the right partners/people
The decision to enter an outsourcing partnership should be concentrated on the added value that is created. For this to happen, your partner should be able to provide productivity improvements and clear reporting. Trained professional staff dedicated to project management and superior information systems ensures added value to your organisation both in terms of performance and corporate intelligence. Moreover, the key to finding an outsourcing partner is expertise, and only expertise. In this regards, you should aim to find partners, rather than contractors. In our globally competitive business world, quality is never a variable, and only partners have the elements to show you that it is a real team player. 2 3 3. Set objectives and expectations, not guidelines When outsourcing, many organisations implement detailed work guidelines or Scope of Work (SOW) that the outsourcing partner should be referred to. This limits the partners/suppliers innovation, creativity and flexibility. Instead of SOW, organisations should develop a Scope of Objectives (SOO) which is a flexible agreement that rigidly outlines the organisation’s expectation, terms and conditions, and working relations.
SOO describes the results that should be achieved, and not the tasks or ways that should be done. Based on this SOO, the outsourcing provider develops a SOW to describe the detailed tasks that his team needs to go through to achieve the intended results. This gives freedom to the partner to find the most productive and effective ways to provide its services/products to the organisation, and is a mutually beneficial method.
4. Use outsourcing resources in a strategic way
Applying outsourcing resources strategically is one of the keys to an effective outsourcing partnership. The aim of outsourcing should be to increase the value of organisation’s core competencies and not simply a like for like replacement. By this we mean that, every organisation may have issues or problems that demand additional attention from your staff, but not each one of them should be outsourced. These issues should be considered not only to handle, but also take care of themselves. However, the critical issues that distract you and your staff from important issues are the ones that should be strongly considered for outsourcing.
5. Continuous improvement
Outsourcing brings a new set of roles and responsibilities that can produce uncertainties, doubt and fear to the organisation which can lead to confusion. This is mainly due to the reason that organisation’s need to ensure that the mentioned risks are avoided, and the benefits are achieved. Nevertheless, maintaining good, positive and open communication with outsourcing provider(s)/partner(s) is a key element to maintain a continuously effective outsourcing project. Both your organisation and the supplier need to regularly review the goals achieved, problems, complications, and determine a strategy how to overcome those.
To be competitive in the global business world, many organisations consider outsourcing as a strategic method for effective and productive activity production. Thus, the proper use of the mentioned 5 key elements will lead organisations to effective outsourcing services by gaining the benefits of outsourcing and at the same time avoiding the hidden risks that brings.
Parker Solutions Group is a provider of professional training and consulting services across multiple risk disciplines. Among other training courses, it offers the ISO 37500 Certified Outsource Manager training course for professionals wanting to develop the necessary expertise to support an organisation in outsourcing its activities based on the principles defined in ISO 37500; persons responsible and involved in outsourcing services, project managers wanting to lead the implementation of an outsourcing strategy.
Professionals attending our Outsourcing training course will be prepared to obtain the Certified Outsourcing Manager certification which will help you enter in the world of professionals.
For further information regarding Outsourcing and Parker Solutions training courses, please contact Fitim Rama at email@example.com
Or visit our website: http://www.parkersolutionsgroup.co.uk/training/certified-outsourcing-manager.phpDownload Article