General Outsourcing

What to Consider Before Outsourcing

Outsourcing has been present in the market for so many years, tracing back to the 80s, and it has continuously evolved to become what it is today. It has been considered as a staple in the market since most businesses now have realized that entering a partnership with a process outsourcing company has an extensive range of benefits attached to it; even small businesses have already engaged in outsourcing to avail of the benefits that the industry has to offer.

But before one would think of the benefits of outsourcing, one must first consider if the business is already ripe for outsourcing. Most companies have previously engaged in outsourcing but have failed due to unpreparedness. But an unsuccessful outsourcing venture may be avoided given that one knows which areas of businesses must they asses in order to determine whether they are ready to engage in outsourcing.

One must first ponder upon the nature of the business that one wishes to outsource. It is important to identify whether the business that will be delegated to an outsourcing partner is a core business or not. Most professionals would not suggest a company to outsource their core business processes. However, for some industries, there are now companies who are outsourcing their core businesses as they have witnesses that it can immensely affect a company’s performance. As companies outsource their core businesses, they are now able to allot a bigger fraction of their attention to their administrative processes.

Another factor that they need to consider is the skills required to fulfill the duties. As companies offer various solutions that require a specific specialization, it is imperative for companies to assess first if it is feasible to outsource their processes to a solutions provider. It is most common for companies looking to outsource to have their employees undergo training to be able to excel in their tasks. Before a company engages in outsourcing, it is quite important for them to measure their budget first whether they can afford to send the employees into training. This is not the only expense that companies will face as they look into outsourcing as there are still costs that needs to be accounted for.

Budget should also be on the top things to consider when outsourcing as miscalculation of one’s budget may pose challenges in outsourcing as the business partnership progresses. Budget is quite critical since most companies perceive that in outsourcing, business processes will come at a much cheaper cost. One can instantly see the difference in a company’s expenses after engaging in outsourcing as outsourcing can reduce a company’s costs up to 50%. But despite this, one must not be complacent when it comes to expenses, as it has become an issue for most companies.

There may still be a lot to consider before one can engage in an outsourcing partnership as it is going to be a big move for a company. But these key items, business assessment, employee skills and budget, are three factors that should influence your decision to outsource.

About Infinit-O

A provider of outsourcing solutions, Infinit-O’s wide range of services and core team of analysts can deliver efficiently and effectively the solutions tailored according to your company’s needs.

Infinit-O boasts of its long-lasting and growing partnership with their clients who are satisfied with the services the company has offered them.

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The Four Stages of Outsourcing: Part II

Having an outsourcing solutions provider as a partner for your business may prove great benefits to both your company’s budget and operations. However, if your company will rush into an outsourcing partnership without going through the general process, your decision may hinder your business from being successful and from maximizing the partnership.

(This is the second of two parts discussing the four stages of outsourcing.)

As our previously published article, The Four Stages of Outsourcing: Part I, suggests, the general outsourcing cycle is comprised of four phases, namely:

  1. Strategic thinking
  2. Evaluation and selection
  3. Contact development
  4. Outsourcing management or governance.

In most cases, companies who went through the said phases are those who were able to enjoy their partnership with a solutions provider.

With the first two stages of the outsourcing cycle discussed in the first part of the article, your idea of outsourcing should now be tied to the fact that outsourcing plans should be carefully planned and evaluated, from the activities to be delegated to an outsourcing partner to the location where the outsourcing partner is based.

The third stage in the outsourcing process is Contact Development.

What is Contact Development?

The third stage comes in once you have already chosen the outsourcing partner for your business. Before proceeding to Contact Development, it is highly suggested to ask for a trial period for you to be able to gauge the capability of the outsourcing solutions provider.

It is after the outsourcing company was able to show that they are competent to provide the services necessary for your company’s business processes that you move on to the third stage. The Contact Development phase is where the agreements and legal documents are to be exchanged between parties. When it comes to outsourcing, the pricing is usually the main concern for companies because work quality can still be maintained with an in-house team, but at a more expensive cost.

It is in this stage where agreements with pricing are discussed; but even if this particular concern may already be brought up during the first two stages, it is during this stage where the negotiation and agreements take place. Among the important components of an outsourcing partnership are service level agreements (SLAs), non-disclosure agreements and pricing terms.

Once the legal documents and agreements are in place, your outsourcing venture is now ready to be commenced. It is in the fourth phase, the Outsourcing Management, where the relationship between the outsourcing solutions provider and the client is built. A healthy outsourcing venture between provider and client must be only not limited to just exchanging demands and outputs, but it must grow into a working relationship. An outsourcing partner that is trusted and preferred by many is able to work a relationship out of a business venture that can eventually lead to the client being comfortable with them. An outsourcing partner should be able to make suggestions on how to further make your business processes efficient instead of just agreeing on every demand made upon them.

About Infinit-O

Infinit-O provides its clients with a dedicated team of experienced outsourcing professionals to provide them with boutique outsourcing solutions, such as accounts receivable collection and sales outsourcing. Outsourcing solutions provided by Infinit-O allows their clients to gain a competitive advantage in their respective fields.

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Outsourcing Goals: Start with the Big Picture

Planning an outsourcing engagement requires careful consideration of both strategic and tactical issues. Tactical issues include work descriptions, processes, service level requirements and so forth. The main strategic consideration is how outsourcing is aligned with overall business goals. We suggest companies start by creating an overarching strategy to guide tactical planning, implementation and life-cycle success.

There are three strategic levels of outsourcing that are typically considered:

  • Business Efficiency – This approach is used where the goal is to maintain existing processes and service performance, while cutting costs.
  • Business Enhancement – This approach builds on the efficiency option but adds the goal of improving services through process improvements, reengineering, new technologies, etc.
  • Business Transformation – This approach extends well beyond the efficiency and enhancement options. Here the focus is making step-change improvements in business performance through fundamental changes in the way the business operates.

Clearly, each strategy requires a different level of commitment, so that is why we recommend considering strategy first. Below are some questions that can help think through the strategic options:

  • What are my top business objectives?
  • What is currently more important, cutting costs or creating value?
  • Do we need to improve operations or improve the business?
  • What are our competitors doing, or going to do? Do we want to think in terms of being more competitive or outmaneuvering the competition and possibly changing the game?

Finally, we find that many firms, especially those new to outsourcing, focus on efficiency only. We believe there is a tremendous opportunity to extend into the business enhancement strategy with just a little more planning and engaging an experienced, quality oriented partner.

We hope this is helpful and look forward to your feedback.

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The Four Stages of Outsourcing: Part I

Infinit-O Outsourcing BPO services

(This is the first of two parts discussing the four stages of outsourcing.) Almost all partnerships that have been successful went through phases that define the actual process of engaging with each other, and that does not exempt the industry of outsourcing. Outsourcing could probably be considered as the industry that relies on solutions providers’ engagement, although seldom announced to the public due to non-disclosure agreements signed by both parties, with companies who seek their assistance to form a partnership. It is with outsourcing where collaboration between two companies, one being a BPO services provider and the other being a company offering different services, since the BPO companies today seem to be able to cater to any industry, keeps outsourcing up and running.

The outsourcing industry continues to prosper as companies realize the benefits of outsourcing and continue to look for an outsourcing partner that has the capabilities fit for their requirements and a partner that they can depend on. However, before both parties, the solutions provider and the client, can attain the peak of their partnership, they have to go through the four (4) stages in the outsourcing cycle. As stated in the article from website China Sourcing, included in the four stages of the cycle used in BPO outsourcing are the following: 1) strategic thinking, 2) evaluation and selection, 3) contact development, and 4) outsourcing management or governance.

The first of the four stages, Strategic Thinking, is when a potential client begins to consider delegating a part of their company’s processes to a solutions provider and sees if it suits their company’s policies and philosophies. It is important first to thoroughly assess whether outsourcing is correct for your business because even if outsourcing may cater to different verticals, there are still areas in which outsourcing may not be fit for a particular process of your business.

Once you have arrived at the conclusion that your business indeed needs outsourcing, it is now time to proceed to the next phase, which is Evaluation and Selection. It is during this phase where you, as an organization, decide on which of your business processes are to be delegated to an outsourcing solutions provider. It is important to determine which of the processes must be outsourced so as to further make your business operations more efficient and so as to avoid redundancy of work. Another important factor would be to determine whether your company wants to have an on-shore or an off-shore provider; there are many outsourcing destinations that you can tap. Although you can find almost all types of solutions providers in a particular country, it is highly likely that a particular location excels in one or two branches of outsourcing, such as the Philippines, which is now regarded as the number one destination for contact center outsourcing and may soon be for knowledge process outsourcing. It is highly suggested for potential clients of outsourcing companies to conduct a background check on the providers that they are eyeing. After all, they wanted an outsourcing partner that is preferred and trusted by many.

Outsourcing is not as easy as it seems to be because there are many factors to be considered. Outsourcing is indeed a cheaper option for companies but when done incorrectly, it may be even more expensive.

About Infinit-O

Infinit-O provides its clients with a dedicated team of experienced outsourcing professionals to provide them with boutique outsourcing solutions, such as call center services and data entry services, which cover different verticals. Outsourcing solutions provided by Infinit-O allows their clients to gain a competitive advantage in their respective fields.

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Top 3 Reasons to Outsource Risk Management

Risk management is a necessary but oftentimes neglected aspect of most business ventures. It can also be a costly, time-wasting proposition, especially in the hands of an amateur. And yet more often than not, many companies assign risk management duties to staff members whose core competencies lie in other areas of expertise. This is because most companies are apprehensive about the idea of putting a significant piece of the business into an “outsider’s” hands.

However, outsourcing risk management functions to a third party is worth it in the long run. Here are three good reasons why you should consider outsourcing your risk management issues as opposed to keeping those tasks resolved within your company:

1. Cost and Time Efficient

Lowered costs are the number one reason, so many companies have embraced outsourcing in recent years. Doing the same thing for risk management follows the same logic: you save salary and benefits expenses by hiring an expert who is not on your payroll.

You will also save a significant amount of time because a professional risk manager doesn’t have a steep learning curve to contend with. A staff member whose primary job description has nothing to do with risk management will need more time to understand the intricacies of the job. An expert, on the other hand, will know the ins and outs of the task that comes with years of training and experience in handling such matters, so they get the job done, and they get it done fast.

2. A Crisis Prevention Plan in Place

The real test of a good risk management plan lies in how quickly your company recovers and how soon it opens its doors for business after a catastrophe occurs. An outsourced risk management professional will help you draw up a crisis prevention plan that is tailor-fit for the unique needs of your company.

While the best scenario is to never have to resort to using a crisis prevention plan, having one in place will give you the peace of mind of knowing you’re prepared should the unforeseen happen. Getting professional advice and having a backup plan are invaluable resources that will protect your business’s future by reducing downtime. A good plan will help you get you back on your feet as soon as possible.

3. Future Risk Projections

We all wish we had a crystal ball to tell us what will happen in the future, especially if it’s something unpleasant. The next best thing is to hire a risk management professional. These experts are trained to put together a risk management assessment by reviewing company contracts for hidden risk exposures. They will analyze your company and make projections of any future risks that might occur within your specific industry. They will then recommend strategies based on an informed decision, studies, and assessments.

Projecting future risks is important because it prepares you for any possible scenarios that will help you control unwelcome scenarios that might take place before it becomes a full-blown crisis.

Outsourcing your risk management solutions might seem uncomfortable, but once you get past any unfounded concerns about data security or confidentiality, it’s one of the best investments you can make for your business.

Managing your business’ finance and accounting on your own is taxing and does not always result in favorable results. With our customized solutions, rest assured that all your concerns would be addressed accordingly and at the same time, it would allow you to concentrate on other important factors vital for your company’s growth. Learn more!

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What are the essentials of a good business process outsourcing contract?

I have always advocated investing in time to carefully develop and negotiate your business process outsourcing agreements. They can be a powerful mechanism for promoting accountability, efficiency and mutual success.

I am not a lawyer and would never attempt to dispense with legal advice. But I have been involved with enough outsourcing engagements to know what a typical manager should keep in mind during this phase of the outsourcing lifecycle. And having your agreements reviewed by an attorney is a must.

Most contracts contain four major parts – the master agreement, operating principles, Statement of Work (SOW), and Service Level Agreement (SLA). For me, it has always been easier to develop these in reverse order or, as Stephen Covey suggested, ”begin with the end in mind”.

So let’s begin with the SLA. The essential elements of the SLA are listed below:

  • Start and end dates of the service
  • Schedule for reviewing performance
  • Data to be used in measuring the service level
  • Required levels of service
  • Measurements to be utilized
  • Measuring period
  • The minimum quality of work
  • Provisions and penalties for over- and underperformance

These components are pretty basic, but it is surprising how often some are overlooked.

One final comment on SLA’s, I believe it is a good idea for the client company to explain why the SLA’s are important to your business and/or your clients. This level of understanding will help create the appropriate level of urgency from your partner.

The other components of business process outsourcing contracts are listed below.

Master contract

  • Defines overall legal arrangement
  • Codifies operating rules
  • Provides legal protections
  • Price/fees
  • Services
  • Terms
  • Obligations
  • Trademarks and copyrights
  • Trade secrets and intellectual property protection
  • Ensuring the security and privacy of your data
  • Applicable Law
  • Responding to a vendor that fails to perform its duties
  • Termination of relationship
  • Indemnifications and warranty
  • Confidentiality
  • Force Majeure
  • Conflict resolution
  • Term expiration and renewal
  • Other notices

Operating principles

  • Define how parties will work together
  • Logistic of engagement
  • Handoffs
  • Reporting protocols
  • Governance procedures
  • Work orders/methodology for scheduling work
  • Work forecasts
  • Support processes – problem resolution, etc.
  • Communication plan
  • Conflict resolution
  • Change management process
  • Performance measurement process
  • Disaster recovery
  • Exit strategy
  • Security plan

Statement of Work

The statement of work is so important that I devoted a previous blog to it.

As a final check, the contract must clearly describe:

  • The scope and nature of the engagement
  • Roles and responsibilities of the client organization
  • Roles and responsibilities of the vendor organization
  • Metrics for evaluating performance
  • Recourses in case things do not go as expected

I hope you find this information helpful. Feel free to comment on things I may have missed.

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Should You Outsource? 5 Myths, Facts, and Figures on Outsourcing

Outsourcing has become a popular method of doing business. However, there are still some who are skeptical about its benefits for businesses.

In an effort to clear things up, we have listed down some of the most common myths about outsourcing with explanations on why they are simply not true, and other facts about outsourcing.

Myth # 1: Only large-scale businesses benefit from outsourcing.

Fact: People get this misconception because they see many multinational corporations that have entered into outsourcing contracts. However, the truth is that even small businesses can benefit from it.

For instance, small businesses that have very little to no space in their office to house employees will benefit from just hiring freelancers who can do their work at home. Technology has made communicating with workers from all over the world easier.

In an article for Entrepreneur, Laura Lee Sparks, owner of a small business called Legal Marketing Maven, says that more small businesses are outsourcing tasks nowadays and that “by outsourcing the day to day back-office tasks, the business owner has more time to focus on generating income.”

Myth # 2: Most companies only outsource to reduce costs.

Fact: There is no doubt that one of the driving factors for the decision to outsource is the reduction in costs. In fact, in the beginning, this was the main reason why companies choose to outsource. One survey supports this notion saying that 44% of its respondents outsource in order to reduce costs. However, it’s important to note that those who focus solely on cost fail in the end.

Other top reasons for outsourcing include gaining access to resources unavailable internally (34%), free up internal resources (31%), improve business or customer focus (28%) and accelerate company reorganization or transformation (31%). In the end, aside from cost reduction, what outsourcing really does is help businesses become more efficient.

Myth # 3: Outsourcing only means call centers.

Fact: Call centers to do form part of what outsourcing can provide in terms of customer service. However, customer service tasks are not the only functions that can be outsourced. In fact, studies show that 70% of companies outsource one or more of their strategic business functions.

The top tasks currently being outsourced are bookkeeping, social media marketing, payroll, administrative support, research, and marketing. However, IT remains the most outsourced activity accounting for 60% of all tasks being outsourced.

Myth # 4: Outsourcing means losing jobs.

Fact: In order for a business to be truly efficient there must be higher final output with less input. That’s what outsourcing brings to the table. By outsourcing certain parts of the business to other countries, for example, companies are actually able to provide jobs and help the economy of those nations.

A great example of this would be the growth of the Philippine economy brought about by outsourcing. The country’s BPO industry now employs about a million people and has made the country the second top outsourcing destination in the world.

Myth # 5: Outsourcing is a one-way street.

Fact: Some business owners are hesitant to outsource out of fear that it will lead them to lose control of their business in the future. That should not be the case. In fact, a successful outsourcing contract is built around the premise of a partnership between the client and the service provider. There must be a genuine commitment between the parties to work together in order to achieve business goals. The key here now is in finding the right partner.

The bottom line is that outsourcing can provide many benefits to businesses of all sizes. The important thing to remember though is that you must do as much research as you can to figure out if it will be beneficial to you and if so, find out what you have to do to make it a success.

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The Top 20 Outsourcing Blogs of 2010

The internet is a veritable treasure trove of information and blogs make up a huge chunk of it.  According to Universal McCann, about 64.5% of internet users read blogs.  A staggering figure to be sure considering that as of September this year, there were about 1.9 billion internet users in the world.  In outsourcing, blogs are essential if not even more so, mainly because sentiment towards outsourcing tends to go either way.  With this in mind, we decided to search the internet for outsourcing blogs and compile a list of the blogs that we think deserve to be called one of the top blogs on outsourcing on the internet today.

Infinit-O’s Source department has been providing source management services for almost 5 years and today, they manage over 12,000 sources for our Outsourcing Information Insight platform. We have developed a comprehensive 8 stage process for adding and maintaining specific sources of interest for our clients’ requirements. To do this we classify sources using criteria that are fully customizable to our clients’ needs.

Some criteria are taken into consideration when we generated the Top 20 list include but not limited to:

A. Reputation

  • Site reader following
  • Site comment count
  • Site member count
  • Twitter follower count
  • Facebook fan page count

B. Topic Relevance

  • Determined by articles on the site that mention defined company/industry or topic criteria. In this case, outsourcing industry related posts.

C. Author Credibility

  • The author provides own thoughts/opinion/comments.
  • An expert in the field/industry of topic.
  • NOT simply reposting the news.

The blogs have also been categorized according to:

  • Collaborative Blogs – articles are contributed by numerous authors
  • Company Blogs – articles are sponsored or are written by employees for a certain company
  • Industry Expert Personal Blogs – blogs are written by recognized outsourcing industry experts, and are not sponsored by a certain company
  • Organizational Blogs – articles are sponsored or are written by members of an outsourcing association
  • Service Specific Blogs – are blogs revolving around a certain service under the outsourcing industry

So, without further ado, here is the Outsourcing Insider’s list of the Top 20 Outsourcing Blogs of 2010:

Collaborative Blogs

Global Services is a media platform for the global outsourcing industry, providing information, news, events and expert insights into the BPO and IT industry.

Horses for Sources is the destination for collective insight, research and open debate of outsourcing industry issues and developments.  Three years old and running, the blog is led by industry expert Phil Fersht.

oDesk Blog – Considering that freelancing is outsourcing on a smaller scale, the oDesk Blog is one great resource for tips and advice on outsourcing for the freelance community.

Nearshore Outsourcing in East Europe – Giving a regional take on outsourcing, Nearshore Outsourcing focuses on the news and developments, as well as investigating trends that surround the Central and Eastern parts of Europe.

The Outsource Portfolio blog was created by Mani Malarvannan.  It offers different points of view among the different sectors of the outsourcing industry.

Outsourcing Buzz blog is a great resource for those who want to join a network of people who monitor the developments and trends in the outsourcing industry.

The Outsourcing Weblog offers a wealth of advice about the outsourcing industry as well as providing insight on outsourcing reaching a broader market.

BPO Voice is a blog network for business process outsourcing professionals, including yours truly.  The blog offers, aside from articles on outsourcing, an array of news, views, and services designed to help BPO professionals.

Company Blogs

EquaTerra Blog – Truly advice worth keeping, the EquaTerra blog provides helpful insights into the outsourcing industry, and presents it in a clear, concise manner.

Infosys Blogs – Authored by Infosys employees, the Infosys Blogs offer some insight into the goings-on in Infosys, while providing tips and advice for outsourcers as well as for companies looking to outsource.

Integreon Blog – The blog by Integreon provides detailed information about legal process outsourcing, as well as educating readers on the merits of outsourcing.

Outsourcing Leadership, which is supported by Alsbridge, is a great resource for information, news, and research on outsourcing, offshoring and shared service centers.

SQC-Service Quality Central – Previously known as the QAQnA (Quality Assessment Questions aNd Answers), it is the official blog of the C Wenger Group.  The blog focuses primarily on quality assessment and customer service in the outsourcing industry.

Virtual Observations – The CSI Call Center Blog – The corporate blog of Coordinated Systems Inc, it features news about the company and some tips on how to improve contact center agent performance.

Industry-expert Personal Blogs

CIO’s Inside Outsourcing by Beth Bachelor offers news, opinions and thoughtful discussions on outsourcing in the IT industry.

Pragmatic Outsourcing – Nick Krym author of the Pragmatic Outsourcing blog, shares his 5T’s – Thoughts, Tools, Tips, Tricks, and Traps of outsourcing, in a witty and thoughtful manner.

The Outsourcing Debate – Authored by NOA Director and EquaTerra UK Outsourcing Advisory Services Director, Lee Ayling, The Outsourcing Debate livens up the outsourcing industry as Ayling shares his comments and opinions on the latest in the outsourcing industry.

Organizational Blogs

Outsourcing Russia – A great destination for those who want to read on the growing IT industry in Russia.

Service-Specific Blogs

Legal Process Outsourcing – After only two years of tracking the activity in the Legal Process Outsourcing, Legallyours was already awarded as the Best Lawyer Toolkit Blog by ABA in 2007.

TriNet HR Blog – The blog by TriNet caters to those who are interested in getting insight and information on Human Resources issues, as well as management best practices and leadership tips.

About Infinit-O

A pioneer in Social Media Analytics and Research outsourcing, Infinit Outsourcing’s core team of analysts and researchers can deliver efficiently and effectively, in rapid time, the data your company and clients need. With almost 5 years of experience in sourcing and research outsourcing, Infinit-O believes that a hybrid solution of technology and human complex insight can deliver further in-depth understanding.

At Infinit-O, we offer a multitude of sourcing and research services including source management and categorization, data mining, sentiment analysis, demographic profiling, and data coding.

Learn more about our Source Management Solutions.

Did we forget anyone? Let us know at the comments below!

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How Small & Medium Businesses Can Grow with Outsourcing

A large number of enterprises in the United States alone are small and medium businesses (SMBs). While entrepreneurs who’ve left offices to start and grow their own businesses feel success is underway, they do feel bogged down by problems they have a hard time solving by themselves. When they feel more pressured to spend more on all kinds of improvements, their expectations may lead them to overhaul their strategies or just close shop completely.

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5 Trends That Will Advance the Coverage and Value of Outsourcing in 2020

Small to medium businesses have limited financial and operational resources. They need to focus their budget on profit yielding investments and direct efforts toward business growth. Most of the time, it is a challenge operationally to manage in-house staff for additional but equally integral tasks such as customer support, IT, and accounting. Outsourcing is a cost-effective way for SMBs to execute these integral functions without overspending.

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