There is a lot riding on your outsourcing investment. The investment costs can be high and the workload needed during the pre-outsource and transition phases is demanding. And even if you have unloaded the business function to the service provider, there is still one thing you have to do - monitor your outsourced project.
The first few months of life of your outsourced function, will most likely not see the high returns you have hoped for. Especially if you have gone through the transition phase hastily (which can prove to be a mistake), you will probably have lesser savings that anticipated. More often than not, you will have the CFO breathing down your neck - asking for the promised savings NOW.
If you find yourself in this position, we have a few tips for you to be able to measure if this outsourcing investment is indeed worth your while.
In truth, there are several factors to consider when you are calculating your savings. It goes beyond adding the profits and subtracting the expenses.
To start with, you have to remember exactly why you went into outsourcing in the first place. For instance, if you outsourced your customer service to a call centre in the Philippines, one of your outsourcing objectives must be to improve this function to achieve higher levels of customer satisfaction. Secondary objectives could include brand improvements and first hand market research. These are things that could be a challenge to quantify as they are not directly affecting your sales - as compared to telemarketing, for instance.
Also, the strategy to implement a function must be aligned with your objective. Otherwise, you will be getting the wrong results from your service provider thus garnering disappointments instead of success. Not only does it have to be aligned, but it has to be within your capabilities and the budget you have set for yourself.
Clients can also focus too much on the SLAs. Though this is central to your success measurement, it is hardly the whole picture. The SLAs will only allow you to measure the performance of your manpower - but it will not give you a picture of just how much the outsourced venture has transformed your business towards growth.
Another factor to consider is change. Oftentimes, clients stick to their original arrangement - which can only end up limiting you. The outsourcing venture is not just a means to transfer a function - it is also a catalyst for change. Over time, you have to respect the service provider’s expertise in developing the function entrusted to them. Work on suggestions that may veer away from the original path you have set - but make sure to still follow your objective - or even be an improvement on it. At the same time, you must also build up the retained workforce to adapt and take full advantage of the new arrangement with the provider.
By considering all these factors, you will have a better idea of where this investment/arrangement is taking your company. Remember, though the quantifiable measures are important, the qualitative outcomes of your project are also a key factor to the success of your outsourcing endeavour.
For further information contact:
Bruce Mills
Joint CEO & Director
3W IT Consulting | IT Contracting
Free Call: 1300 857 773
P: +61 7 3897 3009 | F: +61 7 3102 6280 | E: bruce.mills@3w.com.au | W: www.3w.com.au
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