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Six Keys for Outsourcing Success

by: Ronald Escanlar

Friday, February 18, 2011 |

The global economic crisis has definitely affected last year’s performance of BPO companies, but 2011 comes with a wave of change for the IT outsourcing industry as multinational companies re-consider their IT budgets and efficiencies.

Factors that ensure outsourcing success

The IT marketplace is a booming one, with the arrival of new services and technologies, such as software-as-a-service (SAAS) offerings, virtualization, and cloud and mobile computing. In a white paper published by IT Business Edge, they survey the market and found six factors that ensure outsourcing success despite the challenges posed by outsourcing itself.

Setting clear goals is evidently important for both outsourcing parties. Clear goals set the list of expectations of the company and the outsourcing service provider. Companies seeking to outsource some of their operations must create some criteria to rank and rate their own priorities and goals - the criteria can be used in evaluating an outsourcing service provider.

Knowing your strengths and weaknesses enables outsourcing parties to come to negotiation prepared with detailed reports of their companies - the IT assets involved, the dynamic relationships, and policies in place.

Evangelizing the change among stakeholders is very vital, especially since outsourcing can directly affect the livelihood of employees. Companies venturing into outsourcing deals are more likely to succeed when they make transparent decisions and effectively market these decisions to their employees down the line.

Considering the intangible benefits aside from cost savings brings value to the outsourcing contract more than anything else. Outsourcing service providers have the expertise and the tools that client-companies can not just buy off the shelf.

Managing an outsourcing relationship requires a totally new perspective in managing resources, especially to managers who have to deal with outsourced experts and staff. Operations are more than just filing and evaluating SLA compliance reports. Large outsourcing advisory firms have developed industy-specific techniques in helping C-level executives manage outsourcing hierarchies.

Applying a structured transition is highly significant, since this is the most sensitive stage in an outsourcing deal that can spell success for the venture or doom it altogether to failure. Fifty-six recipients of the 2009 Outsourcing Excellence Awards said in the paper “Best Practices for Risk Mitigation in Outsourcing Transitions” (Outsourcing Center 2009) that “their transition phase was the point that either threatened to derail their relationship or that allowed for long-term success.”

These are the best practices that have been appearing in surveys among companies relying on outsourcing. The playing field has been leveled for both outsourcing start-ups and veterans, who can now offer better services to companies who see the competitive advantage of effectively deploying outsourcing in their global operations.

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