outsourcing

Outsourcing failures often not published but it is so easy to make it right

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Had yet another meeting last week where the top guns were telling me about the failings in their outsourcing project. Many times now I have sat in meetings and heard depressing stories about the real problems faced after an outsourcing transfer.

Recently Zurich did warn that organisations should ‘prepare for two years of IT disruption’ when they outsource. However, this type of press is rare. Most of the conversations I have are absolutely dire, with very poor performance and real relationship problems creating conflict and reverting to strict contract rules. However as soon as I ask about quoting people I am told ‘The only thing I could say to be quoted would be the good things’. This means of course that many organisations go in to an outsourcing contract without fully realising the problems that others are experiencing.

Our own research has suggested the following issues can exist for organizations after an outsourcing transition:

* Lack of organizational learning and ‘memory’,
* Reduction in innovation,
* Reduced long term responsiveness from staff,
* Poor negotiating, linked to above and cultural differences (both organizational culture and national culture, especially in off-shoring),
* Anxiety and low performance for remaining staff (survivor syndrome),
* Intangibility of services can exacerbate conflicts between clients and suppliers,
* Difficulties with relationships with (ex) colleagues,
* Outsourcing viewed as ‘failure’,
* Misunderstanding of roles,
* Issues around career development,
* Financial losses due to contract misunderstandings and relationship history.

There are some really good tips on the link below about how to renegotiate when things go wrong:

Computer Weekly

However, there are still problems, as in the real world careers are made or broken on these large contracts, and trying to renegotiate, especially shortly after doing the deal, is an admission that things are not right and (potentially) you made the wrong choice. Not many managers are brave enough to do this, they put their careers before the company (more about this on the psychology blog I think…)

Anyone else had this experience, or any views?

Selective Outsourcing

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Selective Outsourcing

By Ishani Mitra – EzineArticles.com Expert Author

The outsourcing industry typically encounters two types of investors. Those who are willing to outsource few of their business operations, and know how to do it, and, those who nourish an inclination to outsource, but also harbor doubts because of stories about potential that portray outsourcing disasters. This (second) group of investors, falls into the category of people who would want to see for themselves if outsourcing will work for them, without relying on unreliable third party information strewn all over the internet. This means, they are willing to take the risk, but want to form their own opinion out of experience, and not draw conclusions from the contents of studies, websites and blogs.

“Selective Outsourcing” is aimed at building trust and establishing compatibility between the investor and the outsourcing partner before any long term agreement is reached with mutual consent. This means, while the outsourcing partner works on specific modules, the investor retains control over the overall function. Payroll Management is an excellent example of Selective Outsourcing. Payroll is classified as an HR responsibility. The concerned personnel has to account for each salary component such as leave policy, performance pay, overtime compensation, increment policy in accordance to labor laws, etc. for every employee in the system. The figures need to be meticulously entered and painstakingly double checked to avoid any mistakes, all under the pressure of delivering the completed report before 72 hours of salary due date. Many companies are wary of outsourcing their complete HR operations, but are more than willing to outsource the payroll management.

Payroll Management is time consuming, repetitive and a critical time-bound task. The HR department is under tremendous pressure. This creates a backlog at other HR functions. By selectively outsourcing their payroll management system, companies have saved time, money, and valuable man-hours that can now be channeled towards other HR activities that directly affect the company’s overall performance, such as recruitment and induction training, workforce management, grievance redressing and welfare schemes.

Selective outsourcing is also considered to be the most practical way of identifying the right kind of outsourcing partners. Let us consider a case, where you, as the Investor (or Small Business owner) have a series of graphic demands. With several self proclaimed graphic experts all over the internet, it gets hard to identify, who is actually qualified. In this situation, instead of handing over the complete graphic needs to a certain “expert”, you can check them out; by having them handle just a part of your graphic needs, e.g. a logo, a banner, an icon. Each will be considered as a separate project. This will allow you to evaluate your “graphic expert” on the following grounds:

Reliability: – Does the person deliver what has been promised?
Acceptability: – Does the end product meet your requirement?
Compatibility: – Does the process of deployment and delivery suit both of you?
Communication: – Are response time and other things satisfactory to both?

In other words, Selective Outsourcing allows the investor to see beyond the “all or nothing” approach to outsourcing, and to see the development of customer specific strategies that are tailor made to suit the investor’s needs.

Steve Cameron, senior vice president of managed services at Steve Cameron, senior vice president of managed services at Siemens Business Services on his interview with IT Business Edge says,

“The number-one benefit our clients are seeking is cost savings through the innovative application of the selective service. This also gives the client transparency in the cost structure because of the fixed scope of the selective IT element under management”

It has been noted that about 80 % of Irish businesses use Selective Outsourcing in one way or another. The Outsourcing Evolution remarks that several companies struggle with the costs associated with printing and have opted to use selective outsourcing to fulfill their needs by using the services of Outsourcing partners like Ergo

A Survey conducted by Watson Wyatt predicts that steadfast growth in Selective Outsourcing will be seen among small and medium sized business in the coming years. Companies need to step back and take a broader look at how outsourcing can work towards the overall benefit of business by employing the Selective Outsourcing Model. OutSorcerer.com – Virtual Assistant Outsourcing Services is a leading provider of low-cost, yet reliable virtual assistants to help busy entrepreneurs magnify their efforts.

Read more content about outsourcing, productivity, work-life balance and entrepreneurship at OutSorcerer OutLook Additionally, Ezine readers qualify for a special 13% discount off the first 10 hours. Just enter coupon code EZINE1 and experience the OutSorcerer.com magic today!

Article Source: Ishani Mitra – EzineArticles.com Expert Author Selective Outsourcing

People in an Outsource will respect a manager who is fair and honest

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Can people in an outsourcing respect their manager for saying how it is but hate the organisation who are letting them go

I was thinking about outsourcing change management and the observation that those being outsourced often speak with respect about the boss delivering the message whilst being very hostile to the organisation actually forcing through the reorganisation. It has often happened to me when talking to people being outsourced that some managers or leaders are able to give bad news when it is necessary whilst still maintaining a good relation with their staff.

From a justice perspective, followers, or in this case the ones on the ‘receiving end’ of the outsourcing change, will judge the leadership exercised as to the degree which it is fair. That is leaders can motivate followers by following ‘fair procedures’ and followers can as a result become more supportive of the direction or goals being proposed and exercise good organisational citizenship – even when the goal being proposed is adversely affecting them.

This can be sharply contrasted if you think of a more distributive type of process where the person affected by the change only sees the instrumental issues – how the change is materially affecting them (loss of income or job for example). What this forces us to consider is how people apply different yardsticks when looking at an organisation’s position and how this can inform us why a person could simultaneously ‘respect’ the person who is communicating the bad news whilst keeping this distinct from poor justice perceived at an organisational level – or from another person or department elsewhere. I.e. is it seen as fair what the company is proposing as articulated by the manager compared to the way it is actually carried out at a company level. For example an outsource in order to gain cost advantages over an incumbent workforce would I suspect be judged adversely in a distributive justice sense, whereas a correct and fair application of the selection of the people affected by the outsource, as done by the manager, could be seen as procedurally fair if done with integrity – you would probably hear things like ‘he’s only doing his job’ or ‘he has no say in the matter’ but never the less ‘he’s a good chap.’

You could also take another view more directly related to identity and leadership: followers internalise the leaders perspective and construct an identity congruence to the leaders (buy in to the vision) and the issues around Identity in terms of the organisation (letting go and the processes involved in breaking the psychological contract) and constructing a new identity with the new organisation in outsourcing or ‘downsizing’. These types of processes also affect those left behind – i.e. be distanced from the organisation as a consequence of a poor outsource process. These sorts of processes could also help us ‘explain’ a differential response to the different players within an organisation (respect the manager but despise the organisation) – this is seen a lot in downsizing or outsourcing organisations people leave and organisation with a bitter taste in the mouth. It should not be forgotten that poorly outsourced people are probably lost as customers for the rest of their lives!

What this means is that the response of workers to an outsource can be greatly affected by the way messages and procedures are actually executed. A fair and equitable approach delivered by a well trained and respected manager can actually help in reducing resistance to change – in effect stopping causes of resistance at source.

Royston