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Strategic Outsourcing,Strategic IT Outsourcing,Strategic Outsourcing Solutions

Strategic Outsourcing

Introduction

Outsourcing has become a highly popular business strategy in the current decade. Businesses take to outsourcing for different reasons like cost savings, access to latest technologies and specialists and flexibility. While outsourcing has helped many companies to reach the top, it is not advisable to go for it without studying the scenario. Businesses need to think over their requirements and plan properly before they approach vendors for outsourcing agreement.

Have a Strategy

As we saw earlier, a company needs to study its requirements and problem areas before it decides to outsource. This is not all. In fact, the best way is to develop a strategy for outsourcing. This means that the company has to study its long term goals and identify which parts of the work to outsource, the reasons, how long and where to outsource. It also has to study the costs and determine if it is more beneficial in the long term to outsource or to do the work in-house. There are also aspects like the political and economic stability of the outsourcing destination that need to be taken into consideration. Given below are some of the key aspects of the outsourcing decision making process.

Choosing the Right Destination

The right kind of destination should have a stable political and economic environment. The destination should provide ample choice from among a good number of quality certified software or other relevant outsourcing service providers. Availability of skilled workforce, good communications and internet infrastructure and a compatible time zone are other important parameters. And last but not the least, all this helps only when the labor costs are lower than the buyer’s country.

Choosing the Vendor

It is desirable to choose a vendor who has already built a good reputation. The buyer needs to also look into how well equipped the vendor is to recruit and train the required manpower. The vendor has to be quality certified and also should have good infrastructure and scalability. Also important is to study for whom and for how many the vendor has been working. Multiple technological skills are another advantage.

The Contract

The outsourcing contract is a very crucial aspect of the outsourcing process. It is therefore important to have a full-fledged contract with all the necessary information clearly spelt out. It should also have a service level agreement (SLA). It helps a great deal to have the terms flexible and expandable. The contract should also include licenses and other warranties duly signed.

Communications

The company’s communications with the vendor do not end with signing the contract. It is crucial to have ongoing communications between the buyer and vendor. Therefore the parties have to establish a channel for communication and convey the specific needs, expectations and problems as and when they arise.

Measure Your ROI

The success rate of the outsourcing arrangement can be known only when the buyer and the vendor have a proper system for measuring their return on investment (ROI). Taking these steps can take an organization a long way in its pursuit of outsourcing success. Measuring the ROI • Measuring the ROI (return on investment) is the most important step in deciding the actual success or failure of the outsourcing project. Hence regular measurement of ROI is very important.

By following these simple steps on how to outsource successfully an organization is sure to reap the maximum benefits.

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