• Outsourcing Practice RSS Feed

    by Published on 24th July 2013 09:05 AM  Number of Views: 551 
    1. Categories:
    2. Practice,
    3. Article,
    4. Practice Management

    Eight Mistakes to Avoid in Intercultural Negotiation:

    1. Avoid looking at everything from your own definition of what is “rational,” “logical” and “scientific.”
    2. Avoid pressuring the other party with a point that he/she is not readily prepared to accept; wait for a more favorable time.
    3. Avoid looking at issues from the narrow perspective of self-interest.
    4. Avoid asking for concessions or compromised which are politically or culturally sensitive; you will not succeed with this kind of approach.
    5. Avoid adhering to your agenda if the other party appears to have a different set of priorities.
    6. Avoid speaking in jargon (i.e. using colloquialisms), which can confuse the other party and even create a feeling of mistrust.
    7. Avoid passing over levels of authority in manners that compromise the sensibilities of middle level officials.* The top tier of the hierarchy may have the power to commit the organization or governing entity, but implementation will require the support of people at intermediate and lower levels.
    8. Avoid asking for a decision when you know that the other party is not able to commit.

    by Published on 25th June 2013 09:57 AM
    1. Categories:
    2. Practice,
    3. Practice Management,
    4. Management

    Moving non-core activities performed in-house to specialists outside the company helping the* business to focus on core competencies and improve performance standards is the main premis of outsourcing. The growth and rewards of this practice can be quite high but the downsides are daunting.

    So what are the pros and cons of outsourcing?

    The potential from outsourcing and BPO related activities:

    • Savings in terms of cost from labour arbitrage
    • Productivity improvements from access to experienced and up-to-date skills
    • The potential to focus on the core business without the distractions of a difficult function in-house
    • Enhanced access to expertise (but at a cost)
    • Operational cost control as the cost becomes very transparent and controlled
    • Improved accountabilityas you know who is responsible for what service
    • Flexibility to reallocate resources and meet company goals
    • Improved Human Relations management in terms of career development potential for peripheral functions.

    As for the downside of outsourcing* the list would include the creation of a dependency mentality coupled with a* lack of innovation and integration with the core business – along with a loss of competitive edge. Outsourcing can garner these ill-effects mainly when used as a short term technique to reduce costs.* To avoid this Outsourcing has to be planned carefully going beyond mere cost control and with carefully thought-out strategies and logistics in place to ensure success. A productive nurturing culture is imperative, especially in the beginning, to set the backdrop for a successful relationship.

    How to make the most of outsourcing

    Apart from reducing the development time and the cost for example new services* an outsourcing relationship can free up resources and orient them towards innovation that can really add value to the core business. It is this potential for the sources of innovation to be focused on the core business competitive needs that is at the heart of the aphorism ‘to focus on core competences’ – In fact it means to build the core. There must also be good communications and systematic tracking and measures in place to help understand how the service is evolving and how improvements can be made. This goes well beyond simplistic SLA types of measures and is in fact an example of proactive innovation.* An outsourcing provider who is willing to learn and understand the business drivers of the client organisation and who can provide the right kind of expertise to a client at the right place can be a company sttrategic asset. The type of proactive innovation can make all the difference to an outsourcing partnership.

    Tips for the Outsourcer

    • Treat outsourcing as a strategic investment, clearly defining goals, strategies, objectives and time lines.
    • Choose a firm that has goals you can identify with and a track record that you can use productively in your industry.
    • Set up control processes to manage the interface between the two organisations – treat them as part of the business which is in fact what they become.
    • Once you have outsourced a service* trust the service provider to do the job – heavy handed control or excessive monitoring can get in the way of good service and can only add to costs.
    • Build a contract that has concrete objectives performance measurement strategies and incentives in place – this will clarify things for the provider and provide sustained motivation.

    Tips for the provider

    • As with the outsourcer outsourcing is a strategic investment – define goals, strategies and objectives.
    • Build a contract with the client that spells out performance measurements on the basis of concrete objectives – use it to streamline processes
    • Develop an open rapport with the client build a relation that aligns the interests of the outsourcer, the vendor and customers.
    • Build a measurement system to montitor progress and make sure robust management processes. are in place – use it to negotiate changes and upgrade performance responsibilities.

    The paranoia surrounding outsourcing is slowly waning and being replaced by a grudging acceptance and recognition of how both sides can benefit. Reports are coming in that well crafted outsource deals restate the value of outsourcing – and add to the stability of the concept. According to a Global Insight study sponsored by the ITAA (Information Technology Association of America), the benefits of offshore IT outsourcing added $33.6 billion to real gross domestic product in the United States in 2003. During 2008, real GDP was expected to be $124.2 billion higher than it would be in an environment without IT software and services offshore outsourcing.

    There is value to be achieved by Outsourcing what is needed is a well crafted management strategy to deliver the promise that Outsourcing offers.


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    by Published on 20th June 2013 11:43 AM  Number of Views: 533 
    1. Categories:
    2. Controversies

    A Video about how guys in the US outsource their jobs for the price of a coffee!

    The first bit in particular is very funny!

    kind regards,
    by Published on 20th June 2013 11:40 AM     Number of Views: 705 
    1. Categories:
    2. Practice

    Is foreign outsourcing of American jobs by American Companies immoral? I Say YES!

    Lawmakers in more than 25 states and in the United States Congress have identified foreign outsourcing as a threat to US employment and prosperity. Legislators must ban federal or state contracts with companies that would outsource jobs to foreign countries.

    If no action is taking, US companies will continue to fire American workers in significant numbers and replacing them with foreign workers in low-wage countries such as India, China and Eastern Europe.

    Of course, outsourcing is nothing new. The US and State governments and American Corporations have been outsourcing domestically for decades such services as data base management, janitorial services and payroll.

    The recent increase in foreign outsourcing in which US companies buy services from foreign-based providers has been make increasingly cost effective due to the personal computer and the Internet.

    According to the data from several experts, over one third of the world trade growth has been achieved by means of foreign outsourcing to other countries. This has caused the loss of hundreds of thousands of jobs in the United States and has had a major effect on the US Economy.

    Foreign outsourcing has changed the demand for skilled and unskilled labor and altered the structure of wages in the United States. Foreign outsourcing sends production to countries where labor costs are lower than in the US.

    As a professional web designer, I have seen many American businesses outsource their web projects to foreign countries. American businesses fail to realize that they are spending their money overseas and not supporting the US economy. They are causing American workers to lose their jobs.

    Cire Web Site Design & Hosting provides affordable web design and hosting. We have been in business since 1996. Due to foreign outsourcing we have been forced to reduce our workforce by over 70%. Buying American may cost more, but it is the moral thing to do. Stand proud America and buy American.

    Mitch Webb

    Affordable Web Design & Hosting

    Affordable Web Design Services

    Allow Cire Web Site Design & Hosting to build a professionally designed web site for your company.

    Cire provides affordable web design and hosting for all businesses who want a web site, but don't want to pay large web site fees.

    Article Source: Mitch Webb - EzineArticles.com Expert Author

    Foreign Outsourcing of American Jobs
    by Published on 3rd April 2013 01:09 PM
    1. Categories:
    2. Methods and Approaches,
    3. Controversies

    Multi-Shoring - can risk be reduced by sourcing from multiple suppliers?

    Although the reality is very different a recent article in computer weekly (a UK based IT Magazine) suggested that companies are being more flexible and attempting to spread the risk by outsourcing to different suppliers in different countries. As Leslie Wilcox of the LSE suggested the process looks like 'spread betting'. Although this was a nice idea at least in print the practice of doing this for real is proving more difficult as the basis of off-shoring is often to move low value commodity call-centric services to locations where the language matches that of the home country. Accordingly much of the UK based off-shore market has naturally gravitated to India where a large number of skilled, low paid and disciplined people are available to man the phones. The Indian subcontinent turns out twenty to thirty thousand IT graduates a year for example and as a corollary of their degree course often speak English to a high standard. Another factor that causes management heartache with multi-shoring is the problems of managing several off-shore suppliers - its bad enough with one as the practice has shown.

    Although innovation is appearing as more important at least in surveys when deciding on outsourcing the main attraction for off-shoring still remains labour arbitrage - i.e. cheaper wages. However in India of late they have been 'enjoying' 25% wage inflation in the outsource industry as highly skilled graduates are demanding better salaries - furthermore the attrition rate is extremely high and it seems that graduates do not relish a long term 'career' in a call-centre but treat the job as a stepping stone into the world of work. It is these factors (rather than risk reduction) which is causing companies to explore the world more carefully looking for the next low wage spot. Unfortunately there are not many options and talk of using Malta, Singapore are fanciful and only really in the margins, and Russia and China have immense language barriers to overcome before they can be considered

    Another remark was made in the article that rather than always going down the low cost route 'companies are asking for more innovation' from their suppliers - this is not borne out by any evidence of course and is not clear what is meant by innovation but there is something useful in this comment. That’s the idea is that outsource providers can take up the proposition of innovation and actively improve their service, be more efficient, deliver in more up to date means, whilst constantly improving the cost base. In my view you can have innovation and cost improvement at the same time and suppliers rather than resting on their laurels after the deal is closed should from day one start to improve the service and pass on a fair part of this to the customer. Can you imagine what it would be like to be a customer of such an outsource provider? Working to improve their part of your business to make it more efficient and effective whilst reducing your bill year-on-year - rather than the account manager just turning up once a month to make sure you pay the bill and renew the contract! If suppliers did this they would probably have continuous rights to the business and be invulnerable to critique and outsourcing would look something more like a real partnership based on performance rather than just a mechanism gaining access to the market without much risk.

    by Published on 3rd April 2013 01:04 PM  Number of Views: 1150 
    1. Categories:
    2. Risk and issues

    Just reading an article where one of the key messages was 'A bad process automated is still a bad process' - something everyone in the IT industry would surely agree with.

    I argue that the same rule applies to outsourcing. If something is causing you a problem you need to fix the issues before you outsource - or you will still have issues!

    You cannot rely on an outsourcing organisation to fix bad processes, miraculously ensure poor performance turns into high performance, or turn-round a situation where conflict and poor communications is the norm.

    This is again a good reason for allowing an internal bid if you are thinking of transferring an existing department out. Often the process enables the department to get its act together (although sometimes this requires a lot more inter-departmental help too - so may need help from the top).

    With very few exceptions, if an outsourcing supplier tells you they can 'fix' your problems - make sure you get full details of exactly how they hope to achieve this. Look carefully at the response, as there will often be holes in it.

    Are there any good suppliers out there who would like to give us advice on this?

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