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How to Improve Outsourcing Output

by: Sarah Joson

Tuesday, October 2, 2012 | Outsourcing News |

In some outsourcing operations, processes often get stuck at a certain stage, which lead to unremarkable outputs as the process which was deemed fruitful when the contract was drafted is no longer applicable and needs to be updated. Some organizations even state that with outsourcing, they are getting the same output at a lower cost. Another issue with tightly controlled contracts is that more often than not, there is no room for innovation during the planning stage.

How to make the most out of outsourcing deals

In an article posted at Info.ISG-one.com, ISG Director Bruce Everett shares ways on how outsourcing can help organizations reduce costs while increasing productivity as well as improving operations.  

1. Create a checklist of possibilities. Each function of an operation requires different levels of supervision, resources, and of course processes. It is better to plan for each segment. Other things that firms should look into are demand management, proper allocation of skills, cloud computing, etc.

2. Monitor expenses. A good way to evaluate proper attribution of costs in an outsourcing operation is by establishing a benchmark and including the performance gaps. This will give businesses a better understanding of what’s going on with the cost utilization within the operation, and adjust budget accordingly so that they will produce more with less expenses. There are also several ways that can help firms realize which areas need more improvement. One of these is conducting consumer and staff surveys.   

3. Creating an equal partnership. To make the most out of an outsourcing partnership, clients should provide equal windows of opportunities for providers. This will act as a motivator for the contract and in the end will create a win-win situation for both parties.

4. Initiate good practices. Apart from the things mentioned above and the adoption of technology and increase in budget, key factors such as proper work ethic and attitude help drive labor productivity. Employees who are presented with the right motivation and are properly trained can add more value to the company. If employees are trained to go by the book, they are more likely to develop robotic behavior, but if given more freedom, they will be able to produce more in a sense that they are allowed to innovate and think out of the box once in a while.
5. Proper management of contract and operations.
Like in any other contract, proper governance is crucial as small mistakes created years ago can escalate and become detrimental to the entire operation. By keeping an eye on the contract, challenges will be easier to overcome and compliance will always be met.

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