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Should I outsource?


All about, if outsourcing in general makes sense and what to consider and how to approach outsourcing for it not to become a failure.

Who has not heard horror stories about failed outsourcing initiatives. Many organizations that attempt outsourcing often forget that the key to any successful outsourcing initiative is shared goals and good management.

Often outsourcing is only seen as a way to save money quickly and there for implementations are rushed into without the proper planning and without any detailed documentation of the business processes to be outsourced. As a matter of fact, documenting all relevant business processes as they exist today and the way they should exist in the future with the new outsourcing service provider will allow for a much smoother and painless implementation. Only developing the proper documentation will allow all parties involved to clearly understand all the needs, requirements and challenges of these processes.


Use your in-house know how

It is also important to take responsibility for requirements. Incomplete or misunderstood requirements can make an outsourcing project more expensive as budgeted or even may fail a project completely. Nobody knows your business better than you and the outsourcer probably ever will. It is up to you to gather requirements from your business perspective and explain them to the outsourcer. Only this will assure that your needs and requirements are understood and documented accordingly. The next important step is providing training. Very often training is ignored, but good training is an important key aspect.


Do not blindly rely on your outsourcing partner

In order to show quick saving, poor documentation is often thrown at the outsourcing partner, with the expectation that they would be able to deal with it, and then the partner will be abandoned. Such outsourcing deals will fail for sure. It is important to maintain control. Outsourcing does not mean abandoning and/or losing control. It is wrong to assume that the outsourcing partner knows it all and maybe even more and there for will be able to perform better, faster and cheaper. It is important to have key people that control and maintain relationships with outsourcing partners. These key people will maintain control and guide and govern the outsourcer.


Milestones and KPI

It is also important to implement metrics or key performance indicators (KPI) that are important to your business. Assign people that understand these metrics and are able to perform benchmarking of your outsourcing partner against these KPIís and present them in a readable and understandable format that will allow to draw conclusions and take the necessary steps if required. Last but not least, review your relationship regularly, as you would do with an internal department or internal staff. Make sure to review KPIís, technical infrastructure and operational infrastructure. Combine reviews with clear measures to indicate problems or progress.


Pros + Cons from the employees’ point of view

Horror stories as mentioned above, will often emerge from the employees of the affected companies. Indeed, it may be challenging to work with somebody else from a third party outsourcing company, especially if one has just experienced colleagues getting laid off. But if you look closer, discharging experienced personnel may sometimes results from prior mismanagement, and it is possible that a well-performed outsourcing concept may be the only way to keep things rolling.


Remember if managed correctly, an outsourcing deal will be a win-win situation for both sides.


Oliver Schmid, EzineArticles.com Basic Author
Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, onshore outsourcing to Canada and domestic Outsourcing of matrix oriented call centers.  He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chainoutsourcing initiatives.


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