HOW TO MAKE OUTSOURCING WORK FOR YOU
There is much hype about the growth of outsourcing. There are an increasing number of success stories but the number of failed projects is also on the rise. This is particularly true of India where weak management and poor infrastructure are damaging the reputation of the whole offshore outsourcing industry even for countries with greater attention to quality such as South Africa and The Philippines.
How do you make offshore outsourcing work for you? I believe that this 10-point plan is a key tool, which can be used to make the difference between success and failure.
1) Right vendor
There are lots of vendors that have sprouted up in developing counties but the difference between good vendors and weak vendors immense. Even vendors that have a good reputation often fail to deliver. The key to vendor selection is to deal directly with the people who will be managing your business on a day-to-day basis. You should be convinced by their experience and ability rather than their technology, client list or offices.
2) Experience counts
Do the people managing the business know how to make your project a success? It may seem like an obvious question but you will be surprised by the poor level of middle management, particularly in India. Experienced managers may be reluctant to move to India. Remember, it is the quality of the operational management, which makes the difference. An account manager sitting at a desk in London has little influence over project delivery in Bangalore.
3) Don’t assume
Anyone who has worked in any developing country will tell you this is the most important thing to remember. ‘Reasonable assumptions’ don’t travel well- what seems logical in London, may seem illogical in India. Remember that you’re potentially dealing with a country culturally very different to your own.
4) Use multiple vendors
If your project is of sufficient size, use more than one vendor. The management of offshore operations generally requires more intensive management. The use of two or more vendors is an effective way of driving continued improvement from your vendors. It also acts as a safety net in case one under-performs. Ensure that the vendors are aware of the involvement of the other vendors. This will motivate them, as they will know there is the opportunity of additional work and having the work taken away from them depending on their performance.
5) Count the cost
It is true that offshore outsourcing brings substantial cost reductions but some vendors propose complex pricing structures in order to hide costs. This is typical of business in many countries, so be sure to always insist on a transparent pricing structure. Vendors will often try to hide costs such as telecoms, account management and other costs. Be careful and always ensure you are aware of all the costs. Be careful and always ensure you are aware of all of the costs before you start.
6) Exit strategy
Don’t start a project without knowing how to finish it. Over the next few years, you will see vendors with weak business models go out of business as their funding dries up. You must know how to cope if you are no longer able to do business with the vendor. This is far easier to control with tactical outbound projects but always be prepared.
7) Continually evaluate
Set Key Performance Indicators (KPIs) and continually review them. Without tight management, problems can occur quickly. It will always be far easier to manage a project if the KPIs are understood straight from the very beginning.
8) Own the strategy
The highest performing outsourcing companies in the United Kingdom are able to define and deliver your call center strategy for you. Whatever they might tell you, very few vendors in offshore locations have this ability. You need to control the strategy and then clearly define the execution plan for your vendor.
9) Sceptics succeed
Work from the assumption that your outsourcing will achieve limited success and that everything can go wrong. Those of us who work in Asia know that it’s often the answers you don’t get which are the most important ones- and that answers should never be taken at face value. Probe deeply in order to ensure you’re not working with the wrong partner.
10) Two way benefit
It may sound like I am telling you to give your offshore vendors a hard time-but you need more than that. Your account has to be worthwhile for the vendor .If your account is unprofitable or not worth the effort for the money, you will receive a sub-standard level of service. Of course you need to ensure you receive your money’s worth but there is a limit. Executed effectively, offshore outsourcing can be a win-win for the client and the vendor. Costs in many Asian countries are so low that everyone can benefit and the quality can remain high and even improve.
About the author
Rob O’Malley is one of the world’s leading experts in business process outsourcing. He is a founder and The Chief Operating Officer of Asian Call Centres, a vendor of offshore call centre services based in Manila.