There is no one-size-fits-all approach to guarantee outsourcing success. But a combination of common sense, a structured approach, and learning from others’ experiences will go a long way.
That is why, in this guide, we are going to have a quick look at some of the most crucial steps that you need to look into when outsourcing.
If you’re thinking of outsourcing some of your business operations, then this guide is for you.
Stages of Outsourcing
The starting point is to understand the full lifecycle of an outsourcing deal so you can formulate a successful outsourcing plan.
There are six stages of an outsourcing lifecycle:
Stage 1: Assessment
The initial stage where you determine whether you should outsource or not. And if yes, know the scope of your outsourcing deal.
It is in this stage where you identify:
* what you want to achieve
* the financial benefit you will gain from your outsourcing contract
* the costs you will incur to deliver the benefits
* the risks which must be mitigated to ensure a successful outcome
* the overall size and shape of your contract, aligned with your business needs.
Stage 2: Preparation
You come up with a list of vendors that best fits your company profile at this stage. You will also be outlining the detailed requirements you want to be included in your Request for Proposal (RFP) document..
Your RFP should include relevant industry-specific regulatory requirements, key deal-breakers, outcome and performance standards, timelines, and how the transition from in-house to outsourced will take place.
Stage 3: Evaluation
The evaluation stage covers the careful consideration of all your shortlisted vendor’s proposals followed by negotiations that will result in a final shortlist of partners for contract negotiations.
The overall aim at this stage is to identify and choose the vendor(s) who will provide the best value for your outsourced services. Do another background check, if necessary, take them through final due diligence, followed by contract negotiations.
Stage 4: Commitment
The commitment stage is also considered the contract negotiation stage. It is primarily to get your deal across to your vendor and achieve the best value for your money.
Contract development and negotiation are central at this stage – from drafting the terms and conditions, right down to the signing of the agreement.
The objective is not getting the lowest contract price but rather achieving the optimal long term benefit for yourself and your BPO partner.
Stage 5: Transition and Transformation
The transition of the work and resources to your BPO partner happens at this stage. Focus is on process implementation, project management, and knowledge transfer.
At this stage, any pre-transition issues such as logistics should already be resolved. Sessions to discuss operational procedures in meeting agreed services would be taking place. Ramping up and necessary training to educate staff on both sides will also be completed at this stage.
Stage 6: Operation and Optimization
The final stage of the outsourcing lifecycle is the relationship management between you and your BPO partner. It involves monitoring and ensuring contractual obligations are fulfilled in a timely and effective manner and making sure that service demands are managed and satisfied.
It is essentially the operational responsibility which continues throughout the contract until the renewal, renegotiation, or termination of the partnership.
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