The Process Of Outsourcing Part Ii

There are some instances that outsourcing could be just as expensive as tackling

the service internally, but can afford several advantages related to skills and expertise that are not otherwise found in using internal manpower.

Sometimes, one of the considerations the Board should keep in mind is whether or not there is a need to resort to outsourcing existing operations. Would the company incur significant savings in transferring the job to outside personnel? Would there be a dramatic increase in the quality of services if third-parties will shoulder that part of the business as compared to the quality of the service provided by the company's workforce?

The risks of contracting outside personnel should also be considered, as well as the expertise and the manageability of these possible pitfalls. This is particularly important especially for the companies that already have existing processes but wish to transfer them to a third-party supplier for various reasons like better technical capability or cost-reduction. One most important question to address is - would workforce morale be negatively impacted by the decision to outsource? Facts point out that, in the past, employees react negatively to decisions to transfer their work to people from the outside, and not connected to the organization. Some employees feel unsecured with this kind of setting.

Supplier Proposals

After the company has decided that it needs to contract people from the outside to provide the services for them, the next step now is to choose the BPO firm to enter into an outsourcing contract with. The selection involves a set of steps that should be followed in strict order, and requires careful deliberation.

The first step in selection is to send out a request for proposals to potential partners. In this step, the company sends out invitations to all possible organizations that have the capacity to provide the services at the scale that the company needs. These providers are then asked to propose their services for a price that they would specify in bidding.

RFPs (Request for proposals) serve several purposes in the decision process. First, they help the company solicit correct and factual information regarding the providers and their actual capabilities in relation to the service and processes to be outsourced. It gives potential BPO firms the information they'd need against which they'd tailor their proposals. They also make sure that the providers do not engage in fraudulent misrepresentation of facts in order to close the deal for themselves.

by: Lawrence Perry

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