Niyamath Parveez

Looking to outsource is an option that many firms are looking to do but where to start? For a large firm, there may be a number of departments within the company that can be outsourced and this means that the decision about outsourcing needs to focus first internally. Not every department or workload is a great fit for outsourcing and some areas within the business may be core strength. If a company has core strength or something which stands them apart from their competitors, it would be very silly to lose that easily. This is why outsourcing decisions need to be based around value as well as cost.

After the decision is made about which department to outsource, the decision then comes about who to work with? The internet is likely to provide some clues but when choosing a supplier, is it likely a firm would pick any supplier from the internet? No, there is likely to be a great level of research and in-depth study carried out to ensure that the best solution is found. This is the same sort of thinking that should be used when deciding an outsourcing partner. Making sure that outsourcing is seen as an important factor will go a long way in finding the best fit.

It is fair to say that India has developed a great reputation in recent years for providing outsourcing work and many companies will instinctively go there. This may seem like a great idea but again, there needs to be a level of thought about this to ensure the best choice is made. Just because an outsourcing firm is based in India does not mean that they will be any good, so the actual firm itself has to be examined. It may well be that firms outside of India will be able to undercut the price.

This is because so many nations have seen the positive effect that outsourcing has had on the Indian economy and they naturally want in on the action. This has led to these companies and countries using the same tactics as India used to undercut Western nations. However, now it is India that is being undercut and the cycle of market forces spins again. This was inevitable and the smart Indian firms will have seen this coming and attempted to provide some form of insurance against it. The established firms will be able to offer experience and wisdom, which will hopefully provide value for money as opposed to just the lowest price.

All of these factors need to be weighed up before any semblance of outsourcing decision can be made. When a firm just wants to reduce their labor costs, it may seem like a lot of hard work but there is no point in taking the easy option when so much is at stake. Companies would not put their business at risk with other deals or supplying contracts, so outsourcing should not be an exception to this rule. If you want the best outsourcing solution, you need to do some research first.

One of the things that outsourcing manages to do is create paths and diversion along a production line that can cause problems, at times. Ideally, the outsourced work will blend seamlessly into the internal production line but like so many things in life, the perfect way is not so easily achieved. Whilst it can be easy to automatically lay the blame on the outsourcing partner, there are many issues where differences can arise and it is better to settle these before working extensively.

The excuse of outsourcing issues causing a delay has allegedly been cited by Boeing with regards their 787 Dreamliner project. This programme has used a large amount of outsourcing work during its building and it seems as though not everything has gone to plan. Although a company like Boeing would be looking for suppliers who could offer a low price for the work being carried out, it’s not always as simple as that.

The quality of the work has to be a serious factor in any outsourcing business agreement and a deal that does not insist on this is likely to end in regret. If the agreement specifically states that a certain standard or product or service must be maintained then both parties can enter into the deal with a greater degree of confidence. Similarly, the exact same can be said about deadlines.

Meeting deadlines is the backbone of many industries and firms who regularly fail to meet deadlines will inevitably lose custom and business, as well as any reputation they may have once had. With so much relying upon the final product being delivered when it said it would be, deadlines are crucial. Many modern business deals include penalty clauses which are liable to the partner who causes the deadline to be missed.

However, sometimes it is not always the fault of the firm who are further down the supply chain. If incorrect or poor orders are given from above, then it is hard to see how a firm could provide good service. There is a saying that a chain is only as strong as its weakest link and if poor communication and dialogue causes errors in the production line, it is better to look at the causes for this.

With regards to Boeing and their 787 project, bad decisions by management, poor leadership and negligent planning are all being cited as reasons for the delay and all of these are as valid as the outsourcing project not working as it was intended.

This means that whilst an outsourcing agreement can sometimes cause problems and issues, it is not always correct to blame the outsourcing work, although it is certainly easy to do so. Boeing are probably very happy to make their displeasure with the outsourcing work very clear but it may well be that many of their own internal issues are to blame as much as nay partner. Outsourcing can be a cheap solution or a great quick fix but it shouldn’t be the first place to turn to when things go wrong and a scapegoat is needed.

The privatization of many of the UK’s major industries happened a long time ago (although people still remember about what Margaret Thatcher did and will be ready to party when she passes on) but there is still the feeling that the companies who run the major industries should be looking after the interest of the British public first and foremost. Of course, this is nonsense as these businesses are exactly that, a business and need to protect themselves and their shareholders first and foremost. There have been a number of disagreements and problems with a number of these industries and this week has brought a sharp focus to a number of jobs and employment prospects in these areas.
The National Rail service has floated the suggestion that they are about outsource all of their call center work to India in a move that may see around 100 jobs lost in Britain. With UK unemployment figures being extremely high, any further announcement about job losses is going to cause an outcry but when it comes from a firm who many still see as being at the front of UK firms, well, there is going to be a lot of public anger. These changes are lined up for December, which will ensure there is an unhappy Christmas for a number of staff and their families but with the cost saving benefits offered by outsourcing call center work to India, it is hard not to see the business argument for doing so. The business argument is obviously very different from the moral argument and both should be kept apart as much as possible in order to find the best decision for the company as a whole. Suite often , the sacrificing of a number of jobs can lead to a greater saving of many other jobs and this may well help bolster and stabilize the economy in the UK. There are obviously going to be people upset about this situation but many customers will feel the benefit in the long run.
Using an offshore outsourcing partner that specializes in call center work should enable the National Rail service to obtain a great level of expertise and quality in their workforce. The British public definitely likes to moan and one of their most common complaints is about the poor service offered by call center staff at some of the nation’s big industries. This means that there should be an improvement in the call center work offered by National Rail and this may see some consumers happier with their lot. A good cost benefit analysis would try to take this benefit into consideration but again, the emotive aspect of people losing their jobs is always likely to be felt harder than the benefit of some people being happy at receiving a better call center service.
Whatever, the upshot of this outsourcing decision is, there is no doubt that whilst the recession rumbles on, many industries will be taking a look at the way they are set up in an attempt to see if they can make any savings or benefits to the way they run.

The citizens of Scotland like to moan about how wet and windy the weather is, but sometimes it can have its advantages. Whilst some countries suffer from heat-waves, the humble Scottish are usually experiencing damp and moist conditions which aren’t always great for humans but they can have benefits in storing computers. Yes, the fact that the Scottish temperature is a couple of degrees cooler than their London counterparts is more than enough to make a huge difference in the cost of storing a lot of computers or servers. This is due to the fact that these appliances are prone to overheating and need to be constantly monitored and the temperature will have an effect on how quickly they warm up. This cost benefit has led many firms to consider using Scotland for their computer storage centers and has positively impacted on Scotland’s ability to outsource.

Of course, a wet and windy climate also provides ample opportunity to make the most from alternative sources of power and energy and this is also something that is making Scotland look far more attractive to firms from other countries. There is an obvious need for many firms to show that they have a “green” or environmental outlook on life and being able to use outsourcing suppliers which have access to alternative sources of energy is a fantastic PR boost. The minimum wage that is paid in Scotland may not be as low as the equivalent wages in countries in Asia but for the overall benefits that will come to a firm, it is apparent why Scotland is a key outsourcing partner.

The best example of this comes from the plans submitted by ‘Lockerbie Data Centres’ which really goes the extra mile with regards to environmentally friendly plans. The company hopes to harness the power from wind farms situated close to their center and in return, they propose they would be able to use the heat built up in their data center to provide a source of renewable energy for over 700 local homes. This is a perfect example of giving something back to the community and would be considered a great PR boost for anyone needing to extend their “green” credentials.

Add to that the fact there has been a definite move to IT training and ensuring large swathes of the population have computer skills and it is all to noticeable that Scotland is perfectly suited to offer computer services to firms and this is something many developers in Scotland are keen to take advantage of. There is currently a group of developers and investors looking to create new centers in Scotland at various locations throughout the nation. Some are keen to develop in the Borders area, and this will benefit from being situated close to England. Others are keen to move to the Highlands in order to use the breathtaking scenery and quieter pace of life to attract foreign companies to Scotland. The beauty about Scotland is that it is a small country and it is quite easy to comfortably travel its length in a day by road. It may not be something that you would wish to do every day but it is certainly an option and this means that outsourcing to Scotland is an extremely viable option which could bring benefits to many countries.

Following on from the idea of who should be doing the outsourcing facility for a firm and whether there is benefit in looking for an external partner to supply this work, it is important to consider what the reasons for undertaking outsourcing are and how they will affect the outsourcing decision. There are many things to consider when looking finding a company to work alongside in order to gain the best level of benefits for all parties and no company should rush into any outsourcing decision. Having a strong level of preparation and consideration is vital for any firm that is serious about reducing their costs and obtaining the highest level of service possible.

This is why it is imperative for a firm to create a lengthy list of issues and matters that they need to address when looking for an outsourcing partner? What does the firm hope to achieve when outsourcing? Are there specific business functions of the business or indeed industry that are naturally suited to using outsourcing services? Are there any legislation issues or problems that would prevent a serious level of outsourcing taking place? All of these are the initial issues that a firm looking to outsource their work needs to consider and being aware of these matters will place them in a strong position to make the best choice with regards to their future.

The choice of the outsourcing firm to work with will vary for every firm and this is because of the needs and demands that every firm will place on their outsourcing partner. The Japanese model of Just-In-Time would make it nigh on impossible for the outsourcing work to be shipped halfway around the world as it thrived on having stock and supplies distributed exactly when they needed them and this necessitated a close geographical relationship. If your need is going to have many short term demands and a requirement to have instant gratification and delivery times, it is vital to choose a supplier who can promise this every time. If an outsourcing partner lets you down, you will be letting your customer down and in these harsh economic times, this is not something that many firms can contemplate too often.

The same thing can be said about the service industries which do not have as important a consideration made about their locality and this is shown in the huge amount of offshore outsourcing. The call center industry is possibly the best example of this situation but again, the level of customer support that is required by a firm may have an impact on the ability of an outsourcing firm to do the job satisfactorily. If the call center is expected to interact and engage with customers about local issues and things happening in the local region, external staff may be unaware of what is going on or may find it difficult to understand local slang or buzz-words. The offshore call center may provide cheaper wages for the staff but if they offer a service that appears remote and unwelcoming to customers, it may be of no great benefit to a firm.

This is why compiling a list of what a firm needs from an outsourcing supplier is vital before choosing who they should work with.

When it comes to outsourcing, there are many important things that need to be considered to ensure that it is the right move for you and your firm. With so much talk and news stories about the success of outsourcing, it is easy to understand why so many people believe that outsourcing is an easy way to get success and greatly reduce your costs but it is not so straightforward to naturally assume that everything will be okay when outsourcing. It requires proper thought and consideration to find the right partner and to make sure the best deals are being obtained for the benefit of everyone involved.

This is why anyone considering outsourcing needs to properly analyze what their options are and a great way of analyzing anything is through use of the 5 W’s. The 5 W’s can be used in a great number of analytical methods and approaches and over the next few days, you will realize that use of the 5 W’s can help anyone decide if outsourcing is right for them and if it is, who is the best outsourcing partner to work with. The 5 W’s to consider include:

Who, What, Where, When and Why.

As the first place is usually the best place to start, considering the “who” is the first area of study for outsourcing. When examining the “who”, the first task should always be to consider if the task can be undertaken in-house by the firm itself. There are many great reasons for undertaking outsourcing such as reducing costs or improving the quality of the service but if there is no noticeable benefit then the firm needs to realize that outsourcing may not be the best option for them. If this is not the case, then finding “the who” for outsourcing will relate to a separate firm who will provide the outsourcing work.

Outsourcing is now a global business with outsourcing firms being found from right on your doorstep to all the way around the world. Each will have their own merits and negatives and it is important to consider the benefits from all potential outsourcing firms in order to find the right partner. There may be a political backlash if a firm decides to choose an outsourcing firm based far away from their location, particularly when the job situation is so grim for many people. The cost saving of this approach may be welcome but it may well be that the bad publicity makes it an untenable move for the firm.

The next requirement when looking for “the who” of an outsourcing firm is to consider the expertise and skill that they can offer. A major reason for offering outsourcing services is to take advantage of the capabilities built up by a firm over a lengthy period of time and transferring these skills to your own customer base. If a firm is unable to offer any great improvement or strong level of support, it may be unwise to choose them as the outsourcing firm to work with.
Finding the right firm to work with when outsourcing is only one of five elements that need to be considered but there is no doubt that it is a hugely important one. To obtain the best value a number of different element s and areas need to be examined and these other areas will be examined over the course of this week.