The Process of Outsourcing Part II
There are some instances that outsourcing could be just as expensive as tackling the service internally, but can afford several advantages related to skills and expertise that are not otherwise found in using internal manpower.
Sometimes, one of the considerations the Board should keep in mind is whether or not there is a need to resort to outsourcing existing operations. Would the company incur significant savings in transferring the job to outside personnel? Would there be a dramatic increase in the quality of services if third-parties will shoulder that part of the business as compared to the quality of the service provided by the company’s workforce?
The risks of contracting outside personnel should also be considered, as well as the expertise and the manageability of these possible pitfalls. This is particularly important especially for the companies that already have existing processes but wish to transfer them to a third-party supplier for various reasons like better technical capability or cost-reduction. One most important question to address is – would workforce morale be negatively impacted by the decision to outsource? Facts point out that, in the past, employees react negatively to decisions to transfer their work to people from the outside, and not connected to the organization. Some employees feel unsecured with this kind of setting.
Supplier Proposals
After the company has decided that it needs to contract people from the outside to provide the services for them, the next step now is to choose the BPO firm to enter into an outsourcing contract with. The selection involves a set of steps that should be followed in strict order, and requires careful deliberation.
The first step in selection is to send out a request for proposals to potential partners. In this step, the company sends out invitations to all possible organizations that have the capacity to provide the services at the scale that the company needs. These providers are then asked to propose their services for a price that they would specify in bidding.
RFPs (Request for proposals) serve several purposes in the decision process. First, they help the company solicit correct and factual information regarding the providers and their actual capabilities in relation to the service and processes to be outsourced. It gives potential BPO firms the information they’d need against which they’d tailor their proposals. They also make sure that the providers do not engage in fraudulent misrepresentation of facts in order to close the deal for themselves.
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Overpromise, Under Deliver And Perfectionism
You basically understand the kind of competition you are in. You are not the only one who’s doing the business you have right now. There are thousands of them. So for every opportunity that passes your way, you always nod your head “Yes, sir, I can do it.” There’s definitely nothing wrong in taking responsibilities. Clients, after all, would love to work with people who can accommodate their requests immediately. It makes them truly special. In the end, your hard work will be rewarded properly with an increase in your pay, performance bonuses, or more work for you.
On the other hand, when you have too many things to accomplish at one time, you are motivated to always work hard and meet their expectations. But if you’re going to look at it closely, there’s a huge possibility that you’re going to have so much on your plate. You will end up feeling so stressed, and thus, you will be taken away from your main focus, which is to finish the most important tasks available. It’s okay to say no sometimes, especially if it means you don’t want to sacrifice the quality of your work. As they say, it’s always better to say less and do more.
Perfectionism
Everybody wants to put his/her best foot forward. After all, your name is on the line here. Yet, there’s a thin borderline between doing things effectively and doing things obsessively. There’s still such a thing as perfectionism, which, in turn, could damage your time management habits.
Time thoughts considers perfectionism as a very bad approach to work as it can steal whatever time and energy you could be saving to something else. You are investing on something whose results will still be the same if you just avoid yourself from trying to be perfect. Constantly changing the fonts of your presentation, arranging and re-arranging the meeting venue, or even adding graphics or animation to your report don’t really add substance to your job. Worse, you’re just wasting your time.
The first thing you need to do when you’re tempted to go beyond what is asked of you is to ask yourself this question: Will this idea add more value or significance to what I did? If your answer is no, then there’s no reason for you to waste your time and energy with doing something more. Proceed to the next task.
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Non-delegation And Wishful Thinking
Time Management: Increase Your Personal Productivity and Effectiveness defines delegation as one of the many essential skills that a manager or any other person should learn. This is also one thing that an overworked manager lacks, and as a result, he never gets to finish a single task. A true delegator will have less time working and more time for crucial activities, such as planning for the business and work assignments, organizing human resource, and mentoring people to become better.
But I understand your concern about delegation. When you start adding more people into your business or you start creating a team, this will mean one thing: you’re going to spend for salaries / expenses. You think that you don’t have that much money to actually pay these people. Well, have you taken the time to actually check out the online market? There are thousands of professionals virtual personal assistants, writers, web designers, HTML programmers, and the list goes on who are more than willing to do the job at a very affordable price. You simply have to check out their portfolios or their resumes for you to decide if these are the right people to hire.
You think wishfully. And usually, this is where everything goes wrong. You will be blinded by the reality that things are not actually working the way they should be. Common examples of wishful thinking can include getting things done without effective planning. You are also overly optimistic when you decide to give huge and difficult projects to a team that are composed of neophytes. It also means denying the obvious fact that there are some conflicts among your employees.
There are three reasons why you can become overoptimistic about a specific task:
You don’t have any experience.
It’s actually advisable to accept new projects once in a while but not when you don’t have the basic background to the tasks handed to you. Otherwise, you will never be able to anticipate the hidden challenges or problems in the project. False assumptions will eventually take you away from giving special attention to these future conflicts.
You tend to become overconfident.
You know your strengths and your weaknesses, so you definitely know when you are going to likely finish a project or not at the designated time. However, it seems to be the other way around for wishful thinkers. They usually underestimate the problems that they encounter as they go along the project.
The project appears to be so big for them.
A person would like to console himself/herself that everything is just going to be fine if that’s the only way he/she can ever accomplish a very difficult task. When they are uncertain about particular areas of the project, they would often feel uncomfortable about them and avoid them as much as possible. They rather continue on those that they are confident about.
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How To Manage Outsourcing Part II
One reason for this behavior is that employees may feel threatened with the presence of the outsourcer and may feel insecure. This behavior may be their way of addressing their own insecurities. As a manager, it is one’s duty to address the need to educate people as to why outsourcing has been chosen for that function. Management also needs to make its employees understand why there is no need for them to feel threatened by the third-party firm, and that instead they should strive to work together with the outsourcer for the accomplishment of the company’s tasks.
Communication and control are also essential in managing outsourced relationships. Constant and open lines of communication should be maintained, so that misunderstandings in business dealings between the client and the outsourcer can be avoided. A manager in charge of liaising with outsourced assets should be patient enough to understand that it takes time to build-up a stable and working relationship with a third-party provider. Some difficulties and some adjustments in the beginning stages of the contract are to be expected, especially when both sides are still in the process of understanding and integrating each other’s processes into one complete and effective system.
Because you are dealing with two different systems being placed into one, it is important for you as a manager to be able to come up with a structured approach in outsourcing. You should be able to define clear and informative goals to the outsourcer. People, after all, need clear and detailed instructions to get to work. In order for the outsourcer to understand what it should do, the company should be able to convey the direction in which the business is moving to with regards to the services being delegated to third-party providers.
There are instances that one can find a certain department in the company just slouching and doing nothing even though there is evidently work to do. Part of this is because management has given no clear indication as to what the job really is all about; hence, the department becomes confused and becomes ultimately non-productive, because of the lack of effective communication. From this example, you could infer that even in an internal set-up, management needs to utilize effective communication if it wishes to guide its business along the path of success.
A manager can also take advantage of the expertise of the third-party to effect changes within the company’s existing internal system. Because of its outside nature, an outsourced firm can make expert comparisons of your existing systems to its own system or to those that it has outsourced for before, thus it is qualified to give recommendations for internal changes. In order to solicit these recommendations, however, management has to make sure that the relationship is on stable footing and that the outsourcer is comfortable with it. To do this, fostering good communication is essential and necessary.
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How To Manage Outsourcing
There are some companies out there that make the mistake of assuming that outsourcing takes the burden of management off its shoulders, in relation to the function it passed on to the outside party. However, this is a misconception. Even if you outsource part of your business to outside contractors, basically, that part of business is still yours and has your interest in it. Thus, as part of your business, you should be able to exercise management over your outsourcing interests to ensure that the company does not suffer from the arrangement instead of benefiting from it.
The functions performed by outsourced companies are part of your business, and is directly tied to your operations. Despite their advantages in terms of cost reduction, outsourced companies can actually make or break your business. Thus, as part of your managing routine, you should watch closely and make sure that the outsourced functions are of highest quality. This entails visits to the outsourced site every once in awhile, even if it means you have to cross oceans to do so.
One of the challenges of managing outsourced operations is controlling or addressing the negative employee backlash that the move may generate within your ranks. For example, vengeful employees may want to discredit the outsourcer by deliberately withholding information that the latter may need to function properly. Deadlines and specifications are intentionally held back in an effort to show that the outsourcer is not performing well as required, and the company would be better off using internal sources of manpower instead.
From this, one can say that one disadvantage of availing outsourced work is that a company cannot easily go after employees that commit violations because of employment technicalities. Instead, it has to rely on the outsourced company to pursue legal actions as needed, which will take some time to accomplish. Due to the arrangements of outsourcing, Citibank was exposed to the risk of losing customers, because the recovery of the stolen money will take a considerable amount of time if done through legal channels.
There are some in the public who hold the view that outsourced offshore services are a form of exploitation of workers in countries with lower labor wages, because of the demanding nature of the job (especially call centers) and the minimal amount of wages that they are paid. Defenders of outsourcing, however, say that these individuals are benefiting from outsourcing because of the creation of paid jobs for them.
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