Modern times demand modern solutions. I’m talking about outsourcing. It is most commonly associated with IT infrastructure, or it is common for non-core business processes — outsource technical writing, for example. Cost savings and freeing resources to focus on core activities are the main pros of outsourcing.
But before outsourcing something, you need to have a business process in place, and you should be able to control this process to outsource it effectively.
Here’s what you need to bear in mind if you want to outsource some business processes:
1. Define the requirements. It is important to define the success factors for the process. These factors should be primarily focused on delivering customer satisfaction. After these have been defined, you can assess if these are business-critical. If not, it would be best to outsource the process. Cost reduction is an impressive factor; the decision to outsource should not be based only on the economy. Cause other essential factors are quality, predictability, and scalability. Identifying requirements for the outcomes and the relationship and how they fit your organization’s strategy will help guide you through the following steps.
2. Define the process. After having defined the requirements for the process, you can start defining the process you wish to outsource. When determining the process, ensure that the following are covered:
- Process inputs and outputs. How and what your team will deliver to the provider and how and what you expect from the provider.
- SLAs (Service Level Agreements) for each process operation
The Service level agreement should cover response time and turn-around times, but more importantly, the quality metrics.
- Roles and responsibilities. Which party is responsible for each operation and specific roles within the process? The overall process owner must be someone on your team.
- Communication. This should cover day-to-day communications between the teams as well as escalation procedures.
- Metrics and reporting. So you have defined the SLAs- how do you know these are being met? Capturing and reporting should be integral to the process. This means they don’t impose an additional management burden, thereby enabling resources to be focused on delivering the service.
- Exception handling. Nothing always goes to plan. Ensure there is a mechanism in place to handle possible exceptions.
3. Select a service provider. When you outsource something, you enter partnership relations; to make them work, you need to have confidence in your partner. Select your provider thoroughly. You may see this relationship as a simple customer/supplier way where the customer is always right. But here are both sides bringing their expertise. Define your requirements and a process so you get a clear understanding of what you require from your provider.
4. Select a location. You may think otherwise, but the location of the provider is also an important requirement to deliver the service. If you provide customer support globally, it is more effective to have customer support present on the other side of the world rather than doing nightshifts. A provider in the same time zone gives an advantage in communications — it will be affected without delays.
5. Draw up a contract. The contract should be interesting for the service provider, with value in it for them and significant benefits for you.
6. Consider culture patterns. Treat the provider as part of the team — as if they are your colleagues from another office. So when selecting a provider, their culture is an important consideration.
7. Collect information. Ensure that the provider gives the necessary information about their operations so that you have a full picture of the process. You need to be monitoring the process to ensure the numbers from the provider are accurate.
According to recent research, outsourcing can reduce 40–70% costs due to greater efficiencies, automation, and training. Well-defined requirements, suitable providers, and constant monitoring of the outcomes can innovate your way of doing business and ultimately benefit you, the provider, and your customers.
Have a nice day!
Bradley Nice, Content Manager at ClickHelp.com — best online documentation tool for SaaS vendors