Global Out-sourcing Of Business Processes - 30th March 2009
Taking advantage of best talent cost effectively

The time has come for all Businesses no matter the size and this includes small and medium sized Businesses to consider increasing business efficiency through global out-sourcing of business processes. This can help reduce administrative cost and ensure the best quality operational support as Businesses focus on their core business.

A small Business with professional out-sourced support could find its self able to compete globally with the “big boys” or an established brand name as domestic competition increases.

All Businesses should seek consulting assistance in improving their business plan for global out-sourcing. The areas where out-sourcing can contribute towards cost efficiency and increased productivity include:

1. Negotiating  contracts
2. Evaluating  suppliers capacity
3. Streamlining  work flow processes
4. Structuring  requests for information
5. Moving  on to requests for proposals
6. Remedying  operational weaknesses
7. Tracking  delivery through the supply chain
8. Monitoring  credit control and debt collection

Out-sourcing allows for the transfer of a non-core business function or process to a specialist provider, thus allowing the business to concentrate on its core activities at reduced costs. In doing this the Business must be able to asses the risks, costs and performance of a prospective out-source provider in order to get the service it expects. Hence, performing a due diligence on the out-sourcing provider by requesting information on its competency, track record and testimonials are important factors.

In opting for out-sourcing, the Business must also brief its own employees on the benefits and how this will assist and support them in their job performance. Business Consultants can help in negotiating out-sourcing agreements that provide services that support and assist employees in the discharge of their duties. This will go a long way in improving industrial harmony between the employees and out-source provider leading towards greater overall productivity.

Even with a global economic slow down, indications are that out-sourcing will continue but the volume and pricing may be reduced. Scandals like that involving Satyam an Indian out-sourcing giant will encourage stricter due diligence of out-sourcing providers. This will result in a strengthening of the relationship between the out-sourcing provider and client. There will be greater flexibility in contractual arrangements with an increased appreciation of the value added by the people involved.

Out-sourcing providers will have to re-evaluate their services, products and competency of their employees so they may be able to deliver a higher added value to clients. This needs to be done if they are to increase market share under the prevailing economic conditions.

The concerns of users of out-sourcing services include safety, security, competency, efficiency and cost savings. Smaller out-sourcing providers will have to work harder in ensuring prospective clients do not look to established bigger out-sourcing providers by being transparent about their ability to address the stated concerns in order to win over prospects and establish trust even as they maintain existing clients.

One consequence of greater due diligence and transparency by both prospective users and providers of out-sourcing services could be, out-sourcing becoming truly a global business with a shift away from just a few countries like India and Ireland being identified as the main countries providing out-sourcing services. Increasingly, other locations such as China, Vietnam, the Philippines or Winnipeg could become recognized as places to find reliable, cost effective out-sourcing providers. Out-sourcing has always been about getting value for money and as long as a provider can deliver on these two points than geographical location will not be a factor. In a wired 24 hour global economy the big winner will be the provider who delivers on creating value for clients.

Siddha Param
International Business Consultant
E-mail:siddhaparam@worldwidebusinessconnection.com

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