Outsourcing can define your company fate, so look before you leap

According to a recent survey of company executives who pursued an outsourcing strategy, the number one reason for BPO/ offshore investments was expected cost savings. Yet, 25% of those services who outsourced saw no change in costs. Among those who did reduce costs by outsourcing, the average savings was 19%, well short of the high hopes that typically motivate a BPO strategy. Common factors that affect savings include miscommunication, service quality, & security.

However, not outsourcing is even riskier. The competitive environment has become harsher as a result of a historic market depression. Global competition & automated service processes (software driven) have made it even harder for businesses to strengthen their ROI. The most efficient producer is the one who successfully weaves together the best and lowest-cost segment within their company to the finished product.

The risk(s) of offshore investments segments can be assessed, managed, and controlled through proper strategy & service implementation. Independent outsourcing surveyor, Ventoro Institute, found that the leading causes of failure were a lack of preparation by the American purchaser, exclusion of a joint- operation & communication map, and outsourcing the wrong service segment. Each could be avoided with greater diligence on the part of the outsourcing client. "As a rule of thumb, the outsourcing buyer should be the one pushing for greater clarity throughout the entire engagement".

Ventoro estimates that proper service strategy could lead to cost savings of 30%, or greater. So, how do you select a strong BPO vendor?

• Communication: A clear point of contact must be available in person. The point of contact must offer practical intelligence & support you in mapping your service strategy. The "point of contact(s)", are often labeled as the "middle-men of outsourcing" are in many ways a local, and essential agent to the BPO production.
• Quality Control: Check certifications & portfolio. In India, the globally acclaimed program, "ISO 9001-2000" (see example) certifies company(s) for service quality. However, the certification does not guarantee strong ROI.
• Security: If your service maintains sensitive data, ask your BPO vendor to discuss security protocol with you & provide evidence. The ISO 9001-2000 certificate(s) does certify internal security procedures, but does not cover higher level security procedures as required by US federal programs.

BPO specialist, Rohit Barman, the President of DPS America, the exclusive consulting hub for 30 year old global outsourcing firm encourages businesses to "conduct a background check of each company, senior staff members, ask for references, and ensure the company has catered to American clientele for 5+ years." He adds that "you should never take a leap of faith in outsourcing, let proper research define your leap". The result of all this is that if a service fragment can efficiently be outsourced for cost savings, it should be. And those who fail to optimize their service by outsourcing will be competing with others who have conducted their research, and gained ground in the overall market share, with greater ROI & investment potential.