The Four Stages of Outsourcing: Part I

(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 to fit 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 the 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 concluded 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 that 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 to further make your business operations more efficient and 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, a particular location likely 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.

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