Offshore Outsourcing Process
Offshore outsourcing demands extreme caution. In offshore outsourcing clients
are depending on another entity to carry forward their business methods or business process. Clients do this
exercise- because in a particular business activity they are at a lesser advantageous position then
their partners, to whom they outsource their business process.
We have attempted to give you an insight into the process of offshore outsourcing and tried to answer the question: How to outsource?
The process of offshore outsourcing starts from clientís need recognition and ends
with the end of contract.
- Know Thyself First
The primary goal of outsourcing is to gain business benefit
by handing over a part of a business responsibility to someone
who is expert at handling it. This stage of offshore outsourcing
process demands self-assessment. Organization should know which
activities are consuming more resources? What is the importance
of these activities and what business profit would be earned
if it were outsourced? The client or the buyer should be aware
of the effects of each component of his business and should
come to a decision of what and how to outsource. Generally,
clients outsource activities that are of non-core and concentrates
more on core activities.
A client needs to specify the technical and managerial aspects,
which is required in a prospective provider. If the self-assessment
exercise reaps success then outsourcer would come to know various
offshore outsourcing options available in front of him.
Moreover he become aware of his non-core business activities
and accordingly decides the profile of a prospective service
- Request For Proposals
When outsourcer is clear about what he wants, he moves on to
search for the service providers. Request for proposals (RFP)
is an invitation to all those service providers who are mapping
with clientís pre-decided criterions.
RFPís should clearly specify what are the requirements. Clearer
a client is in his RFPís, more prospects of him getting right
kind of service providers. Client can create an environment
of healthy competition to get better outsourcing options.
- Examining the service provider
An RFP will make service providers to approach the concerned
buyer with the required information. Buyer now needs to analyze
all the answers and choose a handful of likely contenders. It
is advisable to measure all the providers on a common scale.
Measuring standards would depend on the type of industry and
the type of offshore outsourcing one wish to carry out.
Read about Global
delivery models used in software offshore outsourcing....
Client should not forget to pay special attention to the financial
characteristics. It is natural that a buyer would make efforts
to calculate the cost savings from an offer. But it is also
advisable to look into the other financial indicators like industry
rating, stability, future prospects etc before you come to a
Factors which client may consider for service provider evaluation>
may range from analyzing companies vision to employee and technology
competence of the service provider. This would include a review
of the provider's new approaches in training like investools
and other applications.
- Choosing a partner
The previous stage would help a buyer in focusing his attention
on few prospective offers. Now, in this stage he chooses one
from them and gives his final judgment. Security, Confidentiality
and Ethics of the service provider can be one of the considerations,
which outsourcers could analyze before finalizing their decision.
Experts in this field advice outsourcers to reconfirm their
assessment by seeking clarification on any doubts.
- Finalizing Contract
A final shape is given to a decision. Contract is a legal agreement
between a buyer and the service provider based on certain terms
It is in interest for both the outsourcers and the service providers
to write a contract in the presence of learned legal personnel.
A contract should be absolutely clear in all respects.
There should not be any scope of misunderstanding. Offshore
outsourcing industry is facing many
business related legal issues. It is imperative to define
provisions regarding the settlement of such issues so as to
establish a healthy and sustainable relationship.
- Measuring performance
Process of outsourcing also contains constant review of performance.
Output is always measured on certain pre-decided benchmarks.
Benchmarking standards and methodology should also be mentioned
in the contract. Experts feel that a client should maintain
a constant check on his service provider and derive means to
make him accountable for his output.
- End of Contract
If all the steps are successfully implemented then the outsourcing
deals gets better chance of bringing in success to buyers business.
On successful completion of the project, the contract comes
to an end.
It should be remembered that the new challenges would feature
with every new outsourcing contract. But a systematic approach
of outsourcers in deciding their outsourcing partner will reduce
their overall risks. Information secured from each offshore outsourcing
contract can make outsourcer achieve desired business results
while maintaining standards in his business methods and process.
The nature of outsourcing deals will decide the execution methodology
of the above-mentioned steps. How the concerned client or outsourcer
deals with the process and which outsourcing methods he follows,
is his discretion.