Outsourcing Disasters – The Key to avoiding them
With all the hype surrounding outsourcing these days . . . many companies are quick to rush into outsourcing their projects or operations overseas.
If you know you can save money on your process that's just the first step. Sure, you can instantaneously reduce your cost by outsourcing your team or project overseas to India, China, or the Philippines, for example . . . but do you have a real benchmark for your process to begin with? Can you compare your operations to your competitors to see exactly what you are lacking?
In other words, take a step back and look at your internal process BEFORE jumping into the outsourcing game.
I was reading an article posted on CFO.com and I think this really sums up my thoughts on thoroughly knowing YOUR process inside and out:
In the rush to outsource, many companies fail to recognize the myriad risks posed by shifting critical business processes like HR, finance, accounting, and supply-chain systems to providers with little, if any, experience managing such processes. Some companies haven't even taken the pains to measure their in-house performance to ascertain if BPO will improve it. "Many companies fail to benchmark process performance," says Stan Lepeak, a vice president at Boston-based consulting firm Meta Group.
"They outsource finance and accounting because others are doing it," adds Lepeak, "and yet they lack comparative metrics like 'how many payables are processed per accounts payable clerk' or the 'spend per purchasing agent' to compare against industry and BPO benchmarks. If you don't have current process performance metrics, how do you know outsourcing will improve upon what you already do?"
Knowing your process and where you stand amongst your competition will enable you to better evaluate what you need from your outsourcing partner. Cost and Efficiency go hand in hand . . . this will enable you to really leverage the benefits of offshore outsourcing. It will also give you a better understanding between you and your outsourcing partner. Both of you will know your goals and requirements, plus it will make for a well defined contract. If the contract spells out exactly what is expected from your outsourcing partner . . . you are now on your way to reaping the benefits of outsourcing your operations.
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