Tuesday, August 19, 2014

How to Face the Challenges of Outsourcing

Just like any powerful tool, outsourcing is always full of challenges. The three most common challenges are: getting the right partner/s, practicing effective governance to make the relationship work, and sensitively managing employee transitions.

These three seem quite obvious, but one challenge usually catches company managers by surprise, and this is what you call accidental transformation. This is when companies outsource without knowing or realizing the style of the outsourced function makes a big difference in its success. When there is an incompatibility of styles, unanticipated changes may come. These can either be positive or negative, so you need to be alert regarding such activities.

There’s also another cause of failure that managers can fall prey to in the new outsourcer relationship and that is ignoring the real work which starts after the contract has been signed. In order to prevent this from happening, outsourcing must be approached as an important project. Its life cycle must be clearly established so it will be properly managed every step of the way.

The changes brought about by outsourcing require both individuals and organizations to continuously develop success skills. For example, executives operating on business-process management principles are most likely to be rewarded for running a lean operation and having fewer staff for their operations like dealing with their taxconsulting leads. Others who may also be favoured are those leveraging third-party relationships that are not consuming resources or typing up capital. These business professionals are using a skeletal operating model with a few fixed but variable costs. Competitive companies are likely to have several business functions that will provide cost savings and value improvement.

The Bottom-line

Everyone will have to live with the realities of the global economy and the endless demands for higher productivity and outsourcing for the years to come. The future generations will have to live with the same realities. There are those who will suffer while others will succeed depending on how the changes in outsourcing will be negotiated. Every aspect of outsourcing must be carefully planned and executed. For instance, venturing into telemarketing, companies must go beyond the general aspects of cold calling and really go the extra mile to provide good quality customer service to their clients.

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