5 Tips for Effective Business Process Outsourcing

PeopleAccording to research by Gartner Inc., midsize companies made up only about 20% of the outsourcing market in 2004. Bigger business have the resources to “try out” new ideas, then they push them onto smaller business after realizing their own successes. However, many small to midsize businesses are now turning to outsourcing in an effort to save time and money.

Having another company complete your business processes for you is Business Process Outsourcing(BPO). Some processes commonly outsources include payroll, call centre, and administrative tasks. Letting an outside company handle these things frees up resources, time, and money within your business so that you can focus it elsewhere in the organization. Many times the outside company provides these services much cheaper than you would be able to using an inside department. The growing move to outsourcing these business processes changes the strategy within an organization over time.

Freeing Up Resources Shifts Core Focus

Business generally choose to outsource operations that are not at the core of their organization. Consider what your company’s main goals and focuses are now. Are they Information Technology (IT) related? Do you trend toward Human Resources (HR) functions? By identifying your core focus, you can decide if Business Process Outsourcing would allow you to shift that focus to something more important, such as building business relations or developing better marketing techniques.

Benefits versus Risks of Business Process Outsourcing

The risks involved with BPO cause many businesses to keep processes within the organization. However, keeping risks to a minimum is possible with careful planning before beginning the outsourcing process. Some risks include quality and cost issues, privacy and security assurance, and losing the personnel or knowledge to perform the task in the future. Assuring that you replace individuals while keeping the same skillset reduces the long-term risk of bringing the task back in-house. The best way to assure privacy and protection of intellectual knowledge is to research the company involved in your outsourcing. You should be sure to copyright or patent protect your intellectual to reduce risks involved with knowledge sharing. Have a lawyer look over any contract to ensure you have sufficiently covered important areas. When researching the outsourcing company, check their record with clients and avoid any with reported issues.

The benefits of BPO far outweigh the risks when companies use it correctly. The main benefits come in the form of time and employees to use for other projects. You will use less of your own resources, saving both time and money. This time and money is then set toward your new company focus, making your business more successful in all areas.

Outsourcing IT Project Management

Outsourcing isn’t exactly a new trend, but it is becoming more mainstream and culturally accepted particularly in the area of IT and IT Project Management. One of the biggest challenges is locating the right people and mastering effective management of external sources which can seem daunting and time consuming; you can fall into the trap of assuming you are better off doing it all yourself rather than take on these new challenges. But it doesn’t have to be this way. Daysha Consulting has been providing IT Project Management outsourcing since 2004 and we’ve compiled 5 Tips that should help ensure the success of any business process outsourcing initiative , whether it be your marketing or your IT Project Management.

1. Don’t focus on cost

Finding the right candidate or vendor below your budget when you are considering business process outsourcing is tempting, but don’t make this mistake. You can still stay within budget if you focus on the quality of results expected and a reasonable price you can afford.

2. Incorporate outsourcing interview techniques

There is no need to perform a full-fledged interview when considering a qualified outsourced candidate. You can, however, line up a set of questions that you feel are important to the scope of the project. Contact prior clients and obtain valuable feedback that can affect your decision. When you are checking references, it is fairly easy to get an honest opinion of the value of work the candidate provided before.

3. Find ideal candidates for specific project categories

Don’t focus on the project as a whole; instead break it up into categories and group tasks together that require the same skillset. Choose team members that have experience in the specific category areas the project needs.

4. Make sure your project scheduling and scope is clear and easily understood

It’s hard to obtain the results you need if your project details are confusing. It’s not uncommon for project managers who are considering business process outsourcing find themselves in a project nightmare because they didn’t state the needs and goals properly. Evaluate assignments and make sure that they are set up in a position to give you the results you need.

5. Have and maintain realistic expectations

It’s easy to get caught up in project pressure, especially with business process outsourcing. Maintain focus and be as clear as possible about the project requirements. Always provide all the information needed to complete tasks successfully. Don’t force unrealistic schedules because it will inevitably impact the overall project cost when things go wrong.

2 comments

  • I liked how you said ‘effective business process outsourcing’ here. Outsourcing might seem like an easy tactic, but some usually fail from using it effectively. Your tips would be more useful for start-ups and small businesses. Thanks!

  • I agree. Business outsourcing companies not only practice their profession but they also value the work ethic of every employee. This is crucial to have a better connection and understanding between their manpower pool and their clientele. Having good chemistry between them and their clients is a critical component that needs to be had if outsourcing companies hope for greatly increased productivity.

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