- Why should I outsource?
- What are common examples of sucessfull outsourcing?
- Am I going to lose control by outsourcing?
- How are service level agreements (SLAs) drawn-up?
- Is outsourcing limited to transactional activities?
- Is outsourcing free of risks?
- How do I introduce outsourcing in my organization?
Q. Why should I outsource?
- Its nearly impossible to be an expert at everything. With limited resources, successful organizations focus on developing those skills which achieve what is really important (core competencies), i.e. becoming the better choice in the minds of target customers, and delivering excellent service Activities that take focus away from building core competencies are considered for outsourcin
- By shifting focus from detailed, day-to-day transactional issues to those of strategic importance, outsourcing enables your enterprise to continuously improve customer service, grow the business and profits, and concentrate on staying ahead of competitors.
- Outsourcing service providers (vendors), by doing the same activity over and over again become very efficient at what they do, and are able to execute day-to-day transactions at lower costs starting from day-one. Companies benefit by avoiding expensive capital projects, sharing resources and reducing risks.
- In today's innovation based economy, there is a shift away from "why outsource" to "when to outsource, what functions should be considered, how to do it, and whom to partner with".There is a reason why outsourcing is growing at 10+ % per year!
Q. What are common examples of sucessfull outsourcing?
Some examples are listed below - this list is not complete
- Organization size advantage faces the threat of growing global competition; small, focused players are able to change their cost structure quickly. Retaining all non-core skills in-house is neither effective nor efficient.
- Product and service cycle times are shorter - competitive pressures demand timely, appropriate responses. If organizations are focused on non-core issues, responses may be neither timely nor appropriate.
- Improvements in financial and operating performance are essential for success.
- Direction of outsourcing tends to evolve starting with activities moving to functions followed by processes
- Repetitive, routine tasks
- Temporary tasks or those that are performed at certain times during the year
- Tasks that are cheaper to outsource than doing them in-house
- Shifting services to a vendor makes operating costs less fixed and more variable vs. more expensive delivery in-house
- More productive use of organization resources by performing higher value-add activities
Q. Am I going to lose control by outsourcing?
Vendors are partners in your operation, who want to work closely with you to deliver error free transactions at lower operating costs according to the service level agreements (SLAs) developed. Given an appropriate vendor, a well planned and executed SLA, and a working governance structure, risk of loss of control is reduced.
Q. How are service level agreements (SLAs) drawn-up?
By partnering with your organization, critical success factors for day-to-day operations are developed. These SLAs are not developed without your active participation, nor do they take shape without your endorsement. Clearly, your company's strategic vision is a key starting point in this exercise.
Q. Is outsourcing limited to transactional activities?
Outsourcing is a process of achieving short and long-term competitive advantage.
- Initially, the focus is on transactional tasks, where the risk of significantly affecting company performance is relatively low.
- Gradually, the scope can be expanded to include other functions, for example, a bank could include calls for general information
- Once organizations are more comfortable with the vendor, and steady state is achieved, the scope of activities can be expanded to cover entirebusiness processes, for example, a bank could include calls for general information to a customer order process covering customer set-up to receivables processing
Q. Is outsourcing free of risks?
Implementing outsourcing, like any other business process, is subject to underlying risks and those specific to scope and complexity of changes introduced. However, these risks are successfully managed by designing business controls to reduce their impact.
Q. How do I introduce outsourcing in my organization?
Contact Qorex by e-mail or by phone and we will go through a step-wise process of designing and implementing a successful outsourcing project. Email:
, Phone: 416-988-0668