What timeline can we expect, and what kind of partners do we need? Which processes should we outsource, and which should we keep? How do you structure the deal to allow for changes in the business environment over the course of the arrangement? Can you outsource a business function whose processes are broken, or do you need to fix it first and then outsource?
How does an outsourcing arrangement impact our relationships with our people? We have projects going all the time; how do you juggle all those projects and introduce outsourcing without the disruption?
Outsourcing conjures more questions than there were available answers. This is particularly true in Asia where there is a scarcity of insight on the subject as it relates to specific businesses. What scares first-timers to outsourcing is the trial and error process that often precedes adoption of new technologies or change processes.
A survey of 565 experienced [in outsourcing] executives by Accenture sheds some light into the hidden best practices. Their experience allows us to minimize the potential loss to businesses that so often come part of a trial by fire exercise.
While the experiences of these outsourcers are as diverse as is their needs, what is a constant matter-of-fact is that "the longer a company engages in outsourcing, the better it becomes at managing outsourcing ventures, and consequently the more satisfied it becomes."
This naturally implies that the few first attempts will always be the most painful and expensive. But as long as the company learns from the experience and change as it moves forward, the continual experimentation should yield the right combination that best fits the business.
But why reinvent the wheel? Below is a seven-piece skill for managing outsourcing arrangements learned from the survey.
Build in Broad Business Outcomes Early and Often: Outsourcing is not only about cutting cost. Companies that integrate desired business outcomes into the exercise early on [and constantly tweaked to reflect changes in the business environment] are able to reap benefits that go beyond pure profitability metrics.
Hire a Partner, Not Just a Provider: Look for a provider that brings a wide set of skills and strengths, and a long-term track record of delivering results. Competitive pricing should not be the only criteria upon which an outsourcing deal is concluded. Experienced outsourcers weigh both "soft issues" and "hard issues" in the selection process.
It's More Than a Contract, It's a Business Partnership: Contracts are the natural guidelines used in the execution of an outsourcing engagement. However, as this is a long-term journey and a path towards a goal, it is equally important to consider performance measurements and the relationship between you and your provider if success is to be attained.
Leverage Gain-Sharing: Use risk/reward incentives to spur performance. This is particularly relevant where special circumstances, such as taking on challenging situations, where circumstances demand the pursuit of unconventional methods to achieve the desired outcome.
Use Active Governance: It is not enough to sign a contract and leave the execution to the provider. In many instances active governance is necessary to ensure that projects stay on course.
Assign a Dedicated Executive: The decision to outsource is only the beginning of a long journey. Successful outsourcers often assign an executive especially adept with people skills to ensure optimized performance.
Focus Relentlessly on Primary Objectives: Companies engage in outsourcing for specific reasons. The pursuit of those objectives, whether cost reduction, process improvement, or the focus on core business, should be taken with unrelenting determination. This above all else defines successful outsourcing projects.
[via http://www.enterpriseinnovation.net]
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