Outsourcing, also referred to as Business Process Outsourcing (BPO), is a process whereby a business organization hires another organization or individual, either domestically or internationally, to take care of some of its business activities. Over the years, outsourcing has proved to be an essential key business function that allows companies varying from a small, medium, and large size to gain skills and services they would find hard to develop due to financial restrictions or human resources or sometimes a combination of both.
This makes it possible to grow a business organization with or without some significant investments and also allows companies to focus on their specialty, improve effectiveness and efficiency and also provide cuts on budget while having other professionals take care of some of their business functions. Although the most famous advantage of outsourcing is the fact that it helps saves a significant amount of money, entrepreneurs and business owners now understand that there are numerous reasons to outsource certain business functions.
Business organizations can easily partner with outsourcing firms specialized in providing services needed. At the same time, a huge amount of attention and financial resources are utilized on other broad and pressing issues within the organization. The outsourcing firms usually possess world-class access and topnotch ability to handle new technologies and a variety of resources. Even in cases when business organizations decide to expand their market, outsourcing is a pocket-friendly way to begin creating foundations in other countries.
Offshore Outsourcing Services :
Nowadays, the functions and services offshore outsourcing service providers render are not restricted and will fall under numerous categories. Most of them provide a number of these;
- Sales and marketing support
- Inbound Customer Service
- Telemarketing Call Center
- Admin and Back Office Support
- Human resource and accounting management
- Web Design and Development
- Online Marketing and Search Engine Optimization
Due to how sensitive information is and how crucial some aspect of a business organization is to them, not all task and functions are outsourced. The tasks and functions chosen to be outsourced vary depending on the business industry. Generally, main types of roles are recommended to be outsourced;
Tasks that are important to business operations but are not a serious component of an organization’s business strategy :
For example, in the case of an organization that produces organic fruit appetizers. Even though the products are expected to be delivered to various retail or wholesale outlets and store, but how that is done is the sole choice of the organization and is less likely to affect the final consumers. Given that these deliveries can be done timely and are cost-effective, it should be outsourced even though there are slight advantages that come with transporting the products without outsourcing.
Commodity tasks : For example, in the case of janitorial services, business organizations tend to need. An organization can either employ fulltime janitors to clean offices and buildings or take advantage of the economic scale that established cleaning firms provide. The finances saved after outsourcing can then be invested in other regions of the business organization.
A business organization would venture into offshore outsourcing beyond its borders for various reasons. Some of the reasons are highlighted below;
- To get services for less.
- Due to span time zones, a business organization might want to offer customer service around the clock.
- To get the best the world has to offer.
The Need For Proper Change Management
Outsourcing implementations and proper change management produce growth and productivity for business organizations. Business organizations need to outsource significant parts of their nonessential activities to a dependable offshore outsourcing service provider, to save up costs and achieve their goals. However, firms need to accept and work on the reality that outsourcing doesn’t mean handing over total control to the outsourcing service providers before doing so. A retained team that can handle complete outsourcing implementation and also work closely with the offshore outsourcing companies is expected to be put in place. Such change management sets the role of the retained team alongside the service providers, including the existing in-house team that has been involved in delivering the outsourced process at the client’s site.
Understanding the Service Level Agreement (SLA) and Post-contract Processes :
If the Service Level Agreement (SLA) is not adequately understood or worked out due to lack of proper dialogue and initial ignorance with the outsourcing service providers, generally, problems and misunderstandings would arise. Utmost importance should be given to the implementation of new processes and activities originating from the outsourcing of specific procedures, which can help develop a symbiotic working relationship between an offshore outsourcing company and its clients.
Understanding Global Culture :
There is usually a significant cultural difference between the offshore outsourcing company and the client. For example, handling the bulk of processes global organizations in India outsource, it involves a different work culture when compared to their western analog. This can be alleviated through a genuine understanding of the corporate and socio-religious culture the outsourcing service providers follow. Interactive sessions and straightforward queries can give useful insights and help flatten the transition of services from clients to the outsourced service provider. Problems ensuing between clients and their offshore vendors can be solved with trust-building measures.
Acceptance and Adoption of Change :
Trust, and the right atmosphere for growth and productivity can be generated through proper training to the retained team, who are in charge of intimating existing employees on their current status and interacting with the offshore outsourcing company. To achieve specific goals, retention policies should be set in place based on skill-set and experience for valuable employees. Similarly, clients should make sure that end-users are not affected in any way due to outsourcing implementations. Furthermore, before the contract, all demands should be made known to the offshore outsourcing service providers to ensure joint planning and decision making. Organizations globally are demanded to understand that proper change management and governance involving outsourcing must be dealt with at the embryonic stage to avoid uncertainty and inconvenience after implementation is put in place.