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Transition of Management Roles in Outsourcing

by: Sarah Joson

Tuesday, January 7, 2014 |

Once a business structure changes to an outsourced setup, a managerís role is bound to evolve.

Managers of internally operated firms focus on the performance of the employees, but once outsourcing is integrated, their focus will shift to managing the entire operation which includes service levels and contracts from external factors such as service providers.    

ISG Director Lois Coatney posted an article at info.ISG-One.com that covers how a managerís role changes once a business setup incorporates outsourcing into the companyís operation:

Contingency plans are prioritized. In an outsourced environment, managers will have to draw up solutions to possible problems to lessen the detrimental effects in an operation.  For instance, when managers encounter a problem in their outsourced setup, they should be able to identify the root of the problem, counter check it with the providers, and then apply the necessary solution.

Success is measured throughout the entire operation. Managers working in traditional business environments are only predisposed to measuring the performance of the employees based on their role and individual objectives set by the company. However, managers involved in an outsourcing operation will have to take into account the additional factors in their new operation. They would have to ensure that the service providers are compliant and are delivering their services properly and accordingly based on the contract.   

Managing operational spend. Managers in outsourced operations will be more involved in the cash flow.  They are given more financial leeway which will mean they would have to set budgets and financial goals unlike in traditional operations where the budget is already set for them.

Results should be seen throughout the company. Managers should make it a point that when they outsource, improvement will be seen throughout the organization and not just in the department involved in the outsourcing operation. This department can also be a growth driver for other business units if the goals and processes are consistent with one another.

Non-compliance will be addressed differently.
A traditional operation is bound by rules that are set internally. However, when managers start to deal with service providers, these rules may no longer apply to them, which is why the manager and the provider should create an agreement wherein there will be penalties if the service provider fails to meet the requirements.

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