The Best Business Outsourcing Process
Business process outsourcing is an established global industry. Companies around the world are constantly on the lookout for leveraging the opportunities offered by the industry and creating value for their company. At the same time, outsourcing providers are constantly on the lookout for new and improved services and products they can offer in an effort to increase revenues and get a deeper share of the customer’s wallet.
And that is perhaps as it should be in any industry.
But what about the business outsourcing process? Do you, and this is more from the outsourcer’s perspective, ever give a thought to the process of outsourcing? How do you go about the process of ensuring that your identified business process is outsourced in a manner that creates the value that was envisaged before it was implemented?
As a creator of value for your business, it needs to be done like any other business activity, with care and deliberation, with defined goals and responsibilities and effectively and efficiently making the best use of company resources, in order to get the best outcomes.
Different companies may have different priorities while outsourcing work and different methods for handling the business outsourcing process. Selecting the right vendor is often the focus of effort for many outsourcers. However, there is a lot more that needs to be done, both before and after the vendor is identified. Without adequate attention to each of these steps, the end result could be sub-optimal. As an outsourcer, that would be a value destroyer, not creator.
Being a deliberate, planned activity, outsourcing needs to be handled in a thought-through manner, right from the inception of the idea. While each project may have unique elements, underlined below are 10 steps that are likely to be common in all, taking the engagement to the point where delivery has been initiated by the vendor. While the process outlined below assumes the existence of a separate outsourcing provider, even if the outsourcing was to be done to another unit of the same company or another company within the same group, the same process and rules should be followed for best results.
Requirement identification should initiate the business outsourcing process
It is probably a good idea and working well for some of your competitors. But that cannot be the reason for you to outsource. As found in many cases where B2B engagements have failed, the issue was with the client (buyer) not being clear about their requirement resulting in engaging an unsuitable supplier, rather than a lack of capability or interest on part of the supplier. ‘What are they buying? Why are they buying? What problem will it solve? What value will it add?’ are some of the questions that should be addressed before any attempt at letting the marketplace know of your intentions.
Identification of the need is usually a good place to start.
Identification of the need would include identifying the business process or processes that are sought to be outsourced, with an effort at reaching agreement on it within the organization.
Along with the process being identified, the reason for the outsourcing as well as the benefits expected should be articulated and agreed upon. This provides a baseline against which future results can be measured. The volume of work to be outsourced should be estimated and the timelines for initiating the process defined.
If the organization wishes to define any overarching conditions, such as ‘we will look for a provider within 100 miles’ or ‘we will have the final say on the people selected by the vendor,’ this would be a good time to do so. As it is for specifying the selection criteria for a vendor.
oWorkers has established itself as a leading provider of BPO services in the short period of 8 years. It is now recognized as a top three provider in its segment of data-based BPO services globally. If you have a requirement, we have a solution for it.
Seeking interest from potential providers
Having thus achieved clarity in the organization regarding the outsourcing initiative, at this stage of the business outsourcing process, the work involving external parties needs to be initiated. You cannot be sitting all dressed up in your home but nobody comes to the party as nobody knows about it. Since an outsourcing services provider is your target partner, this is the time to make it known to that community that you are in the market for an outsourcing partner.
This can be done in several ways:
- Look up prospective vendors through directories like Yellow Pages, or online, and inform them individually about your requirement. They will respond if interested.
- Advertise in trade circles, especially if you are a part of them.
- Issue a Request for Proposal (RFP). This is the process preferred by large enterprises. An RFP is a standardised proposal form where you specify the information you are looking for from interested parties based on which you will be able to evaluate. Develop your requirements in the form of an RFP (Request for proposal) even if you don’t formally issue one. This should ideally cover:
- Overview of the project
- Objective for outsourcing and what you seek to achieve
- Type of data and file formats
- Annotations required and rules defining the services
- Specifications for human resources for the project, including domain knowledge requirement
- Timelines and volume
- Reach out directly to vendors who may be providing similar services to competitors.
We are always ready. With our ability to attract fresh talent, being a preferred employer in our delivery locations, we have boundless energy and appetite for your work. We routinely get feedback scores of more than 4.6, on a scale of 5, on platforms like Glassdoor, from both past and present employees.
If, at this stage, the response from the provider community is inadequate or absent, you may need to go back to the drawing board and introspect and review the terms and conditions you have set out. Perhaps they were too strict for vendors to be interested in.
If you are flooded with responses from prospective vendors, you should make an attempt to shortlist based on the criteria you had specified, in order to make it manageable. As a B2B evaluation process is often tortuous and lengthy, the longer the list the greater the resource consumption in evaluation.
If, however, after repeated attempts you don’t have vendors interested, you may even need to drop the idea and look for alternate solutions.
Our existing clients save up to 80% when they outsource to us. The same opportunity is available to all clients. Our pricing is transparent, with a choice of per hour or per output unit pricing.
Detailed discussion and evaluation
This is where the detailed discussions will happen and both parties will be required to share information. In most B2B cases, this will be preceded by the execution of a Non Disclosure Agreement (NDA) which binds both parties to treating the information received as confidential and enjoins them to ensure it is handled with the utmost care. This is the stage where the potential vendor will make a case for being selected, scope of services will be discussed, including indicative pricing. Based on the NDA, a peek ‘under the hood’ of each other’s automobiles would be taken to understand each other’s processes and systems better for an informed stab at assessing ‘fitment’ and ‘compatibility’ and ‘suitability.’
A recommended list of capabilities and attributes to look for in a partner:
- Prior experience
- Quality and accuracy
- Speed and turnaround
- Multilingual capability
- Technology and Data Security
- Scalability and access to human resources
- Financial health and management support
oWorkers has been a consistently profitable enterprise. It pays local and social taxes for its employees and is deeply rooted in the communities it operates in.
- Shortlist down to 1, with a backup
The result of the evaluation process will be your order of preferred vendors for the engagement. You will know which one is your ideal partner and who is second best. This would be arrived at after detailed discussions, site visits, interacting with staff members, exploring combinations, negotiating on price and service levels.
As the engagement is not final yet, it is advisable to retain the other vendors on the shortlist and not turn them away. This is because there is ‘many a slip betwixt the cup and the lip.’ If a contract with the primary vendor does not materialize, you might be left with no option other than starting the process all over again.
Being ISO (27001 and 9001) certified, oWorkers leverages the best technologies for client projects, through its partnership with leading providers. Staff and technology are the twin backbones of the industry.
Finalize terms and sign contract
The business outsourcing process requires that a formal agreement be executed based on mutually acceptable terms and conditions.
While responsible and successful BPO organisations offering these services will work hard to ensure client satisfaction, it must be remembered that, at the end of the day, they are running their own business first. That business is likely to involve the provision of similar services to many other clients and cannot be expected to look out for your requirements above every other client.
So, how do we ensure that the services provided to us are not putting our business at a disadvantage?
This can be ensured by entering into a contract with the vendor that clearly defines your major requirements and expectations against each.
What are some of the terms that a contract should cover?
- Terms should be defined so that differences do not arise on account of interpretation
- Deliverables and obligations of each party involved, especially the hand-offs from one to the other, and the point at which each party’s responsibility begins and ends
- Term (Tenure) of contract with conditions and process for engagement, disengagement, premature termination, extension and change management
- Payment terms, price, credit period, liability for taxes, and penalty, if any
- Defining the unit of work, FTE hour, units produced, or some other
- The nature of services to be performed and the parameters must be specified in detail, including performance during the “ramp” phase and duration of such phase
- Process of taking on resources, including their qualification and experience, as well as assessments that need to be cleared
- The steps for escalation of a dispute/ issues, with the hierarchy for resolving disputes at each stage; arbitration arrangement as well as jurisdiction of courts
- The various technical requirements like hardware, facilities and the systems requirements required to provide the services and who would provide
- The hours of operation and the Time Zone to be followed for providing the services, including Seat Utilisation, holidays and rules for holidays
- Handling of impact of events outside control, like Exchange Rate movement, or a natural catastrophe
- Nature and frequency of reports and MIS to be provided
These are, as always, guidelines, and should form the basis for developing the unique set of terms required for the service.
oWorkers can often go beyond agreed contractual terms. We possess the flexibility to ramp up and ramp down, by a hundred headcount in 48 hours, to handle unforeseen, and hence uncontracted, spikes. This can be a huge money-saver for clients who would otherwise need to maintain a bench.
Implementation of Project Plan – a key step in the business outsourcing process
If this has not been done at the contracting stage, the parties will develop and agree on an Implementation Plan which defines the steps each of them must take to reach a steady state. In other words, reach a point at which the activities envisaged in the contract are running at the expected level. The timelines are also defined in the Implementation Plan.
Some Project Plans include a Trial Run designed to create comfort for the outsourcer. This would be done based on established criteria for success or failure.
Team identification, training and ramp support
The vendor will need to identify the team that will support activities under this contract while the outsourcer will arrange the initial training. Vendor support teams will start playing their regular roles for this project as well. Technical handshakes required will also be made.
With an emphasis on a multi-cultural and multi-ethnic work environment, oWorkers supports clients in over 22 languages across their three global centers.
Begin work, test and then go full steam
Work begins. If volumes are large, there is a ramp-up generally provided for in the Project Plan. Staring slowly, the work gradually ramps up to handle the agreed volumes.
With a management team with over 20 years of hands-on experience leading from the front, with oWorkers, clients have access to decision makers at the first step itself.
Once the work has been kicked off by the vendor, the outsourcer now needs to ensure that the contract is delivering on its promise. Hence, while the earlier steps in the business outsourcing process thus far would need to be done once, the process of engagement and monitoring is an ongoing one and will need to be done for ever, or till the contract runs.
The contract entered into earlier would have defined the scope of the MIS and reports that the vendor would deliver which would constitute the bulk of the monitoring, including taking corrective steps as and when required. In addition, outsourcers like to periodically satisfy themselves that the vendor systems for collecting and sharing MIS are reliable, as the outsourcer’s business depends on them to function smoothly.
And lastly, business always seeks value. The world changes, new developments come into existence, new processes emerge. The strategic think tank of the outsourcer should always be on the lookout for other options of doing it better or differently.
The reason is the same. For continuing to add value to their business.
It must be noted that with QA (Quality Assurance) and QC (Quality Control) processes that represent the client and aim to detect and resolve errors, oWorkers consistently delivers over 98% accuracy. This is across varied processes and varied measurement systems and scales.