Seven
Ways to Work effectively with your Business Process Outsourcer
Business Process Outsourcing (BPO) is hiring an outside vendor to
handle non-core, but essential, business needs. BPO is a proven strategy
to reduce overhead costs, increase profit margins, secure expertise
not easily available internally, and conserve resources.
Many companies outsource without ever using that title. If your
offices are cleaned by a cleaning service rather than by employees
of the company, or if your payroll is run by a payroll company,
you are using outsourcing vendors.
Some functions - most notably application development and customer
support centers - are being outsourced offshore, most notably to
India, China, and eastern Europe. Other functions, such as Human
Resources, Payroll, Staffing, and hands-on technology support are
best handled by local outsourcers - particularly for small-to-mid-sized
enterprises.
In brief, the way to get the benefits and avoid the pitfalls of
outsourcing is one word: communication. The details involve how
-- and what -- you need to communicate.
- Communicate your needs. If you are talking about payroll, you
can only get an accurate quote if the vendor knows all about your
situation. Are most of your employees salaried or hourly? Are
there part-time employees? Contract workers? Shift workers with
differentials? How many sites are you on, and in how many states?
Do you use time clocks or hand-entry systems? How often do you
run payrolls? How often do people join and leave the company?
- Communicate your current situation. Do you have people within
the company now handling tasks and responsibilities that could
better be outsourced? Is your one HR person broadly knowledgeable
in HR? Are employees in the finance department spending valuable
time supporting HR functions, impacting the Controller's ability
to gather and deliver financial reports that are needed? Do you
have current harassment problems that have not been adequately
addressed?
- Communicate your expectations. Can the outsourcing vendor deliver
the reports that you want when you want them? Do you have OSHA
compliance concerns because three of your sites use toxic chemicals?
- Communicate your limits and boundaries. Payroll needs to be
as much of a zero-defects function as is humanly possible, and
fallbacks to correct errors quickly and smoothly are needed. Applications
that are needed for the hardware launch must meet schedule.
- Communicate about financial arrangements that serve both companies
well. A headcount-based contract usually serves companies well.
Should you need to reduce your workforce by 20%, you don't want
to be locked into a contract based on the original headcount;
should you expand by 30%, the outsourcing vendor doesn't want
to be caught doing 1.3 times the work for the price.
- Communicate internal information well and timely. Have one person
in your company who is the liaison to a designated customer service
or account manager at the outsourcing company. Keep the time you
take to reach decisions reasonable, so that neither your company
nor the outsourcing vendor is kept in suspense for unreasonable
periods of time.
- Communicate both your frustrations and your satisfactions. The
vendor can't correct problems if those problems aren't identified.
You are in a partnered relationship with the vendor, both focused
on making your company successful. Make the vendor aware quickly
of any issues that arise, so that they can be fixed before they
become major problems. Similarly, let the vendor know of your
satisfactions.
With clear two-way communications, an effective outsourcing relationship
can help the enterprise focus on its core business activities and
have a strong partner manage the non-core but essential business
needs.
Rick Kaplowitz (rick@onebpo.com)
is VP of Corporate Development at oneBPO. He provides internal guidance
to the development of the company, as well as providing C-level
coaching, management development, and succession planning services
to client companies. Rick has a background that includes leading
a consulting team at Gartner, serving as Dean and Vice President
at several colleges and universities, and managing HR at Raytheon.
oneBPO (www.onebpo.com) is
a Silicon-Valley based outsourcing company, that offers world-class
business process outsourcing of Human Resource, Staffing, and Technology
services for small to medium size enterprises.
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