OUTSOURCING - OTHER ISSUES
A little too late, is much too late Ė German Proverb.
Apart from the specific issues related to
Personnel there are some general issues that must be
addressed by the outsourcer. If timely thought and appropriate action
is not taken, these issues can affect the successful and timely completion
of outsourced project.
- In-house Flexibility:
Besides training of offshore team, the outsourcer must also prepare
his team for the change in working environment that is to come.
Wrong perceptions relating to
offshore outsourcing within outsourcerís
team must be put to rest. This phase needs to be planned well.
Balancing expected benefits & inherent risks:
Donít expect substantial savings (like reduction upto 80% in your costs) right from
start of offshore outsourcing. Savings will result but over a period
of time. Consider the hidden costs involved in
vendor evaluation & transition
process, layoffs of some existing employees, if need arises, managing
the offshore contract, et all while calculating the resulting
Building an effectual relation:
Outsourced work canít be entirely left into offshore vendorís hands.
Appointing a moderator, capable of maintaining a strong business
relation as well as taking care of whether all the outsourcerís
requirements are met, helps to get the best results from outsourcing.
This moderator can work onsite for better co-ordination and clarity
of understanding between the two teams.
Loss of Proprietary Business Knowledge:
Outsourcing should not lead to loss of business knowledge - your
competitive advantage. Opting for Insourcing is the best
alternative, where your patent secrets are concerned.
Create concrete internal processes before outsourcing:
Clearly identify your fundamental and secondary activities.
The outsourcer needs to well-define his existing specifications
and processes as well as those expected from the vendor. Offshore
vendor may have to compensate for lack of well-defined internal
processes, resulting in reduction of your expected savings. Depending
on these, further decisions regarding following issues can be taken:
-Whether to outsource a service fully or partly?
-Whether to go with a single vendor or multiple vendors located either at
-Whether it is viable to have long-term relation with a single vendor or to
proceed on experimental basis?
Service Level Agreement (SLA):
SLA lists out the minimum level of service to be provided by
offshore vendor. Clarify precisely what, when and how you expect
your deliverables. Offshore vendor and outsourcerís
objectives should be streamlined into a common goal.
Include time-tested techniques to measure performance,
which will help keep a track of the deviations between real
and expected results. Taking care of minute details in SLA
rules out chances of any misunderstanding or disagreements later.
Global Delivery Model, adopted by MachroTech, stands true in terms
of the service level agreement's issues, serving the outsourcer with
required system availability and agreed upon response times and processes,
the two main components of SLA.
The contract duration, which must include transition period,
depends on factors like nature of services outsourced, the
prerequisites required and overall market conditions.
Meeting license requirements:
Make sure that the offshore vendorís license gives him rights to
take up offshore assignments as well as services provided are well
within the limits included in business license.
Warranty should cover important aspects like specification conformity,
quality assurance, and ownership of final deliverables, et al.
Both the parties should have necessary insurance claims to take care off
sudden loss through unforeseen circumstances.
MachroTechís Global Delivery Model, you can be assured that all these
issues are taken care of in time. Global delivery Model is a proven offshore
engagement model and minimizes the risk of Offshore Outsourcing.