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HOW TO FIGURE
OUT IF OUTSOURCING IS FOR YOU?
Kudos to Outsourcing
Is outsourcing good for us? Should we outsource
at all? Of course, yes! There's nothing inherently wrong with
the concept itself! Historically, outsourcing is as much old
as business is, if not more and has made even our day-to-day
lives much easier and uncluttered than we care to notice.
Just have a look:
I don't have space in my house to grow vegetables,
and I can't buy a house with a large kitchen garden, so, I
outsource them from my nearest vendor.
I can wield scissors to cut paper-strips, but
not being any more skilful with it, I go to my hairdresser
for a new hairdo.
I can do my dishes and my laundry, but I find
it too energy-sapping and time-consuming, so, I've hired someone
who would save my time.
So, what do I do with so much of saved time? I write...which
is in fact, my core competency!
And that's exactly the point I want to make.
Same logical sense applies to your business. If you don't
have enough capital or resources or if you want to save some
recurrent costs and focus your time and money on your core
competencies, you would outsource. More or less, every business
out sources to sustain and to grow. Outsourcing has today
evolved into a preferred business practice for managers to
use as a bridge to circumvent business problems, as a handy
tool to focus on core issues and as a launch pad to enable
businesses to register higher growth rates.
CEO SPEAK
In a CEO's words:
"No longer is 'globalization' just a reference
in Webster's New World dictionary, but an energy depicting
a paradigm of many changing aspects of world economies"
-- Patrick Yam, CEO & Founder, Sensei Partners, LLC
"Outsourcing gave us round the clock coverage
where the sun was shining, with well-trained individuals having
excellent IT experience." -- Dr. Marguerite Raaen, Director
of Information Systems, National Cancer Institute commenting
on her results while she was at IBM.
"Versant would not have survived the 90s
without the outsourced/offshore development center-the local
R&D costs were simply too high." -- Nipun Sehgal,
CEO, Enlighta Inc., Ex-VP Engineering, Versant Corporation
"Everything worked in our favor--we didn't
have the soft cost of another body at another desk. Our Company
turned into a 24-hour operation with the time difference--it
was like having someone work the night shift without having
to foot the overtime bill." -- Mike Faith, CEO &
President, Headsets.com, Inc.
The mantra is "focus on what you do best
and partner to do the rest." -- Don Tapscott who has
authored 10 books on technology in business and society.
Finding the Perfect Fit
Now comes the next question....Does outsourcing
fit you? Though it sounds contradictory to what you read till
now but, it is in fact, complementary. Here's how!
Let me ask you this. Do all shoes fit you? Shoes are good
for you and you must wear shoes but which ones? Obviously
the ones that fit your size.
You can have them in as many shapes and colors as you please
as long as they fit one criterion. They should fit you. Some
would call this over-simplification, I would call it Demystification!
We just ought to unpeel the layers off our technical jargon
in order to better relate it with our common sense and thus
enable better decisions in business.
Now, how to figure out if outsourcing fits you? Or rather
How to figure out when and in which particular case in business
outsourcing fits you?
Just like common sense dictates that it's not
a great idea to wear party shoes for jogging or to wear shoes
at all when you want to got to bed, good business sense dictates
that one must do one's homework to figure out for oneself
on case to case basis, when outsourcing is called for. But,
before we drive to that point, let's have a look at the general
pros and cons of outsourcing.
Advantages of Outsourcing
Suppose you've outsourced most of your non-core
business activities. Now, what to expect next? Of course there
are some unique advantages of outsourcing. But, don't expect
some instant transformation or miracle! The results will definitely
show in due time. Here is just a brief list for your perusal:
· Outsourcing enables cost cutting and savings
· Outsourcing enables you to meet deadlines sans stress
· Outsourcing enables you to avail of world-class expertise
and provide a better quality to your customers
· Outsourcing enables you to offload the non-core and
non-differentiating allied activities in your business and
lets you to focus on more important functions
· Outsourcing enables you to gain a competitive edge
over your rivals
· Outsourcing helps you to innovate while you contract
out the repetitive standardized processes
· Outsourcing enables you to quickly respond to the
changing market equations
· Outsourcing enables you to function as a compact,
coherent and streamlined business
· Outsourcing enables quick expansion or upgrade in
business, allowing you to take more orders
· Outsourcing enables you to ward off risks
· Outsourcing enables you to transform a process and
remove any inefficiency
· Outsourcing speeds up your pace towards your long-term
business goals
In fact, outsourcing to a cheaper developing country like
India, where you are spoilt with choices, with abundant talent
in various fields and a vast English speaking population,
will only add on to the general benefits of outsourcing. No
Wonder, India alone accounts for 40% of the world's outsourced
IT projects.
Disadvantages of outsourcing
There's nothing called a free lunch! We need
to look at both sides of the coin to gain a balanced perspective
on any issue. So is with outsourcing. There seem to be some
inherent glitches that one needs to deal with. And since,
it's better to be safe than sorry, we need to examine the
disadvantages of outsourcing in order to be better prepared
to deal with them as well as to make an informed decision.
Here are enlisted some factors that you might have to take
into account before you outsource and also some tips to avoid
them:
· Concerns about confidentiality and
data security: This is applicable on the projects which outsource
banking services etc. where customer information is shared
but doesn't apply on other general projects like programming,
web designing, copywriting etc.
· Loss of control and transparency: It
is generally perceived that outsourcing a process transfers
the control to the service provider since the project is now
in their hands. This is true to a great extent in some cases,
but not if the outsourcer makes it a point to constantly stay
in the picture by actively and carefully monitoring the implementation
of the project, as well as by consistently communicating with
his service provider. There has to be a conscious effort on
part of the outsourcer not to become laid-back but to manage
effectively even post-outsourcing. Even the service provider
would cooperate as he wouldn't want to lose his valued clients.
In fact, a good web portal makes in site provisions to safeguard
buyers from such problems.
· Decrease in responsiveness to the changing
market place: This holds true for bulky process outsourced
on a long-term basis e.g. off shoring to a contact center
for a 2 year contract period, but not for the processes outsourced
on a project-to-project basis through an unbiased platform
on the world wide web. In fact, the in such a case, response
time to changing market realities markedly decreases due to
the more coherent and streamlined business resulting from
outsourcing.
· Differences due to geographical factors
like differences in Time Zone, language, culture etc. of the
outsourcer and the service provider can cause communication
problems but these differences can be managed more effectively
if one out sources to a country like India which has a vast
pool of English speaking professionals as well as a stable
politico-economic entity.
· Increased dependency on the service
provider and limited flexibility: This is again true only
for large-scale off shoring.
· Lack of anticipated cost-savings: This
occurs typically when one hasn't done his homework properly
or has not been carefully selective about the country as well
as the vendor he chooses to outsource to.
· Your in-house employees might resist outsourcing:
This is something every employer needs to deal within his
organization.
· What if the service provider fails
to deliver satisfactory service or runs into bankruptcy: Good
portals and moderators provide for some in-built safety net
for the buyers like escrow payment system in which one need
not worry about paying the service provider till they are
satisfied with the services.
You can easily avoid most of the negative
aspects to outsourcing by framing a strategy that takes into
account these factors and has provisions to deal with them
in due course of time. In a nutshell, pros of outsourcing
highly outweigh the cons which are generally manageable and
in fact, largely avoidable with a well-planned approach and
selection of the right service provider. The best way to achieve
this is through a web portal which provides you with a safe
and secure platform to outsource your business to Indian professionals.
In fact, www.e-guru.in which has tailor-made programs for
the buyers in place is already the preferred destination of
freelancers from all over India to hunt for good projects.
Continued
on Page 2
Ps: This aricle is the property of
e-guru.in and cannot be republished anywhere else.
"Authored by Nadine Gibraltar for e-guru.in"
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