In outsourcing, establishing a sound relationship right at the beginning - even during the negotiating process, is crucial. As the contract builds up and operations begin, problems will definitely arise from poor partnerships which can lead to the demise of the entire operation. Kit Burden shares an article at TechRepublic.com about three important factors that can help outsourcing deals become successful.
Trust in outsourcing deals is probably one of the biggest issues, with all the data and ideas being shared back and forth. Both parties want to gain something from their respective partners. Vendors want to charge more to earn more; customers want to get the best deal at the lowest price.
If one of the parties does not understand a certain part of the deal, the unaffected group should be able to provide resources or answers to lessen disparity in outsourcing contracts. Also, a certain level of openness and control over data should be arranged before closing a deal. An example is when one of the servers suddenly shuts off, affecting the whole operation, the provider should immediately inform the client while finding a solution to the problem.
Variations and Plan Bs
Even if the clauses in contracts are precise and gridlocked, the economic environment and the industry itself might not be so stable. This will then test the flexibility of the vendor-client relationship. It is also hard to predict what’s going to happen next, which is why having margins for errors is a great way of minimizing additional costs.
These outsourcing contracts will of course go back and forth from vendor to provider. These will go through several revisions and will affect the relationship of the partnership. All in all, both parties should help each other grow and learn.
While there are other factors outside the realms of the outsourcing contract that affect a provider-client relationship, having a crystal clear contract in which both parties have a better understanding of each other’s roles and responsibilities is indeed essential to make the outsourcing project successful. Build trust. Keep everything transparent. Be prepared for any challenges.
Here are the cloud computing trends to watch out for in 2012, written by Martin Tantow and published at CloudTimes.org:
The market is going mobile.
Since businesses are seeing that consumers are highly inclined to use the internet, they are pushing for their marketing, services, and transactions to be available online as well. This resulted to businesses competing for the best applications, even the ones focused on commerce APIs or mobile payment systems.
Increase in monitoring infrastructure.
Business activity monitoring (BAM) will be required as the cloud would prompt businesses to put up an in-house station to stay connected with the cloud-based processes. This will make it easy to monitor the processes, customer activity, and cloud services.
Third party service providers will take the center stage.
Aside from the strain outsourcing brings to an operation, businesses that avail of cloud services on top of outsourcing face more challenges. To address these issues, cloud services brokerages (CSBs) will become more popular as these units are known to provide insight and expertise in cloud integration and management, even with other cloud providers like CRM, EAI or B2B.
Business owners will look for more control over cloud data.
Since the volume of data is increasing at a high rate, demand for security, storage space, accessibility, upto-date business processes, and system reviews will also grow.
Businesses will have a unified system.
Businesses will be more interconnected, pushing the business-to-business (B2B) model. Companies will make use of Enterprise Application Integration (EAI) to connect backend processes to the cloud computing world. Software-as-a-service (SaaS) will also be used to support the entire operation.
Storage size will matter.
Imagine the growing number of firms that are migrating data to the cloud - of course this would call for data storage expansion and improved accessibility. This will work best for providers that offer varied content, data provision, cloud services brokerage, and other cloud services and applications.
Providers will offer more Master Data Management (MDM) services.
Cloud solutions provider will push the application and usage of Master Data Management (MDM) services. It is the complete deal for clients who want a little of each of the entire cloud services menu and will be much preferred by business owners since it costs less.
Cloud integration will require additional processes.
Providers are expected to shoulder the additional workload as moving data to the cloud will need more processes to look out for. This would include closing deals with cloud service providers, which would fall under management, then maintenance, which is usually overlooked. However, clients will be expected to improve the entire operation and work on the business process modelling (BPM).
PaaS’ flexibility will boost its popularity.
The ability of platform-as-a-service (PaaS) to provide companies with various means to access and translate data to the cloud platform makes it a feasible model. PaaS is also being considered by firms that haven’t upgraded to the cloud yet.
Security will progress, so will the challenges.
This rapid phenomenon brought about by the cloud has led to several issues and challenges. Restrictions will be made nonstop by organizations that are protecting both the providers and clients who are thriving in the business industry. No matter what type of information, customer and business protection is always the priority for cloud computing services.
More often than not, managers become flustered when they are assigned to manage the upcoming outsourcing operation. When these managers begin to scout for the right service provider, things might get a bit out of hand. Sooner or later, dozens of sales representatives will be bombarding them with sales pitches such as outsourcing ideas and packages.
To remind managers and business owners who are quick to shun these sales guys, here are Information Services Group’s five reasons they should show professionalism to the sales rep, published at TPI.net.
Show them why you deserve the deal. You have to keep in mind that the company you are working for is not the only one striving to remain competitive in this tough economy, so is the sales guy. Although sales guys offer varying factors such as pricing, turnaround time etc., you have to exert extra effort in showing how professional you are because after all, you too are representing your company. So if you are serious when meeting with them, they will be confident enough to tell themselves, “I need to level up my offerings to this person because he/she knows what’s best for the company and amid the numerous providers, he/she took the time to listen to me. I have to give him/her the best package there is.”
You want the best candidates. Like in any company, candidates are often grouped into team leaders, seniors, and juniors. Unlike the belief that providers base the deployment of candidates on the size of the deals, the sales guy knows what’s best for you and is in it for you to win in the industry.
You are up against time. Clients usually blame the sales guy for the delay of the deal’s progress. This often results to an unenthusiastic reaction from the providers. Why? Because if clients start to ask about what was recently discussed and begin to re-set meetings, the sales guy will lose his drive to give you what you need. Listen to what the sales guy has to say so that you don’t have to review what went down during the previous meeting. More importantly, treat them fairly so they will be motivated to work for you.
You want good rates? Beef up your relationship. Whether you like it or not, the sales guy is the only one who can bend the pricing rules for you. He is working to get you that extra price cut and long-term discounts. Be sure to keep him on your side because if you can treat him extra nicely, you will have better pricing results.
You want an ironclad deal. Don’t be disappointed when the arrangements are taking a while. In most cases, the sales guy is working twice as hard to get your contract reviewed by the legal department and make marginal adjustments, ensuring that you are presented with the best deal based on your requirements. Avoid being indecisive because the clearer and faster you give directions, the faster they can secure the deal for you.
In today’s economy, one of the known revenue generators is outsourcing. It is the process that businesses used to combat the effects of the economic downturn that happened not too long ago.
In an article published at SupplyChainDigital.com, IT services and business consultancy firm Capgemini explains that aside from cutting costs, there are 10 more reasons companies should consider outsourcing.
It can expand your business’ coverage. Because companies are now also trying the offshore outsourcing setup where they acquire the services of a provider or establish a captive overseas, they have also increased their customer reach and are now able to segment their processes properly.
Control over ongoing and capital costs. Outsourcing also allows businesses to have more control in allocating their budget, as initial investments or capital costs can now be transformed into an ongoing cost.
System upgrades or restructuring? CIOs can now use different variations of technology services like Infrastructure as a Service (IaaS), Business Process as a Service (BpaaS), and Software as a Service (SaaS) instead of constantly reconstructing the core operating system of the company.
What you see is what you get. Along with business level agreements, providers now have a fixed metric so that buyers know what to expect. This eliminates discrepancies in contracts and can give clients a head start on how they will draw their strategy.
Labor fees are lower. Whether we like it or not, the cost of labor in other countries for high-end services is still lower than the local rate, which is probably why businesses outsource in the first place.
More control over the entire operation. As the company expands, more and more processes are overlooked and become redundant, causing losses to the company and inferior quality of output. Outsourcing enables companies to centralize control over the entire operation and rule out the unnecessary steps that cost money and time.
Outsourcing can help businesses meet the standards. Trying to keep the operation up to par will cost business owners money and time. A credible provider, one that has quite the experience in streamlining business processes for companies, can help reassure businesses that they can achieve, monitor, and maintain standards according to the industry’s requirements. Companies can also choose to outsource only the basic processes instead of sharing sensitive internal information.
It can ignite a business’ capability to grow. Outsourcing offers several business frameworks, enabling companies to expand and maximize their potential.
Increase options for resources. Having an outsourcing operation overseas makes it easier for management to gain access to the fresh talent pool and compete with other global players in the industry. It can also reinforce merger acquisition plans and help fill open positions.
Providers can take care of the basic stuff. Outsourcing companies can take on the processes that are usually considered as additional tasks by the client, providing all the necessary tools and management skills that can help executives focus on their core processes.
by: Sarah Joson
Wednesday, February 15, 2012 | Comments (0)
Category: Outsourcing News
by: Sarah Joson
Friday, February 10, 2012 | Comments (0)
Category: Outsourcing News