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Managing 'Overnight' Outsourcing Transition

by: Ronald Escanlar

Thursday, February 24, 2011 |

How to Manage "Overnight" Outsourcing Agreements

The outsourcing industry is finding itself under intense pressure. Companies that have traditionally viewed outsourcing as something of a novelty are now scrambling to get their core processes shifted to outsourcing service providers that offer support for information systems, transaction processing, finance & accounting, and human resources.

These companies are also finding themselves under severe pressure to manage their 'overnight' involvement with outsourcing as a vital business tool. Some of them assume that roadmaps toward successful outsourcing management are very mature, that these roadmaps can be taken and followed in an hour or written in one page, figuratively speaking.

Leading outsourcing advisory firm TPI lists their Top 5 tips for companies which need to manage their ‘overnight’ outsourcing agreements.

1. Guarantee that clear accountability can be determined at all levels of the outsourcing relationship. A matrix reporting structure creates confusion rather than clear accountability. Make sure that the service provider delivers, and that your company receives the service.

2. As early as possible, outline the roles and responsibilities in the outsourcing relationship. Corporate roles such as Procurement, Risk, Security, Legal, and Audit will be significantly impacted by an outsourcing deal. Define their roles and tasks immediately before beginning the outsourcing operation.

3. Automate management data and workflow. Traditional office processing software packages are not designed to manage outsourcing relationships. Software suites for management data and workflow systems are already in the market, and these can free your outsourcing management team from hours lost to designing macros for spreadsheets.

4. Seek advice from other companies which have successful outsourcing deals. TPI says, paraphrasing a quote, “Once upon a time I had five theories about outsourcing, but no outsourcing. Now I have five service providers and no theories.” Outsourcing is a major move, and you can learn a lot from others who have experienced it.

5. Implement an organizational change management that involves everyone. Outsourcing remains unpopular for some, so the need for transparency and an effective information drive is basic. Rapid transformation can be too rapid for an organization, leaving some employees lagging behind in the move towards change. Always check back, look back, evaluate and assess, then move forward.

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