Monday, July 2, 2012

Detailed Outsourcing Information

As I have mentioned before, Outsourcing is availing services or hiring people to work for a product or provide services to your own business.

What do I need to know before I jump into outsourcing my products or services?

First and foremost, you need to have a checklist on whether or not you need to outsource. Then you will have to consider the risks that involves in outsourcing services or products. Know that there are great advantages on outsourcing but there are implications to that. There will be management processes issues, quality of service issues, not to mention the language barrier issues, as well as security. Whether you like it or not you still have to have a basis for qualifying your outsources. There are also the issues of diversification, in-sourcing output, and of course the standpoint of the labor and of the government.

Evaluation of your business

You need to evaluate your internal business processes. Get a list of items that has become the bottleneck of your supposedly smooth process. There are two types of bottlenecks the short-term and the long-term bottlenecks. These short-term bottlenecks are caused by temporary problems. This may indicate there may be personnel issues within your business. These can normally get fixed as soon as issues were addressed. Long-term bottlenecks are the ones that happens all the time. This usually happens when there are major tasks that needs several minor tasks completed first before it starts. This could also mean that you need to restructure your processes for a better one. Identifying these bottlenecks and fixing them first is one of the crucial keys of decision making before jumping in to outsourcing.

Identifying the shortages of your employee's skill or expertise to areas of your core business processes. Identify them if they are long-term needs or just short-term. When you think it's a long-term need, consider training them more for the lack of skill or expertise. If your current employees does not need to work with the areas of expertise you need, then consider this one as a reason to outsource or just simply hire a new personnel with the require skill or expertise. When the need is short-term it is another reason to outsource.

If your company is in need to cut costs, then this is one of the things you need to learn before jumping in to Outsourcing. If you want to reduce expenses, focus more on the increased profits and an access to vast knowledgeable, talented and highly experienced professionals, then you just got the need to outsource.

Risk management

Now that you have securely identified that your business needs to outsource, there are other things you still need to know about outsourcing. You need to identify the risks that you will face in those processes that you need to outsource.  You have to prepare a risk management system before actually availing an outsource service or product. When you avail services or products from other businesses may it be core parts of your business or not, it will face confidentiality issues as well as privacy and security issues.

Implications to outsourcing

With outsourcing you need to adjust you management style when it comes to overlooking the quality of the service or product that you paid for. It will take a lot of communication methods to gain access on the progress of the service and especially on the products. Time management methods and issues management tracking systems as well as time tracking software and cost estimation software are the ones you need to invest on.

When outsourcing offshore you need to check on the language skills and compare them from one country to another. You need to understand that people who can read, write and speak a language does not mean that they understand some instructions completely. Language barriers may complicate processes as well as confuse things. 

One of the popular security issues that businesses face when they outsource services or products is the security risks. This may be legal, security and compliance issues between the your business and your outsourcer. You have to remember that they may be working for you now but they are not held responsible to your business. You also have to check up on these outsourcers whether they are fraud or not.

When outsourcing the core areas of your business, you need to evaluate the capabilities of your providers. When you outsource consider limiting the power of your outsource provider and give some processes to another provider. In this way, you limit your providers too much access in your business. However when you give too much power of your outsource provider, you also have the risk of insourcing this provider.

Another consideration is for you to know the standpoint of the labor. Outsourcing represents a new threat to them and would contribute to their insecurity that might reflect on their output. Also, when you outsource you will also have to face the government. You have to know your local and national laws about outsourcing.

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