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Elephas Technologies
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Outsourcing readiness is not an ambiguous state of preparation conjured up by consultants to make outsourcing needlessly complex. It is a real condition that describes how complete your company’s preparation is to begin outsourcing.
Following are key factors that have significant influence on total readiness:
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Organizational Leadership and Management Support for Outsourcing
The business decision to outsource should be considered – and made – at the executive level with the assent and support of the board of directors and C-level executive leadership. A clear understanding and acceptance of both benefits and risks is pivotal in solidifying support of your company’s leadership over the long haul. Leadership, however, does not begin and end here. One of the most important actions to take
that will assure good outsourcing management and good results is the nomination of an outsourcing champion. This executive is chiefly responsible for the ultimate success of outsourcing in your organization. Such a figure is equal parts evangelist, troubleshooter and watchdog. A champion of this kind must be highly knowledgeable, both about outsourcing and the business of the company.
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Estimating Business Impacts and Mitigating Risk
Every company, whether large or small, must catalogue and calculate the probable impact of outsourcing inside their organization. In so doing, there should be no future surprises regarding unanticipated outcomes or impacts.
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Impact on the company
Outsourcing will certainly produce impacts upon certain employees, business units, customary business practices, expectations and even company morale. No intelligent change management scheme can be deployed without an informed understanding about what impacts are anticipated and how they will be felt.
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Risk measurement and management
Fundamentally, the comprehensive indexing of risk involves a calculation of the probability of a negative outcome and the actual loss associated with the outcome. Risk computation in outsourcing can be quite complex and can include both objective and subjective judgments in risk quantification.
Total Outsourcing Risk Value (TORV) = Total Financial Risk (TFR) + Total Operational Risk (TOR) + Total Geographic & Event Risk (TGER) |
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Clear Identification of Core Competencies
The ultimate and long-term success of outsourcing initiatives is decided by many distinct factors, but the articulation of core competencies is the very first success factor in the sequence. It is the only practical means of separating internal processes that are true value creators from
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Understanding of Technology Requirements
Identification of comprehensive technology requirements is an obvious preliminary step in the pre-outsourcing readiness assessment.
Security issues are very much at the forefront of business IT priorities right now. Due consideration must be accorded to security when assessing how ready your organization is for the necessary secure connectivity to outsourced service providers.
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Ensuring Stable Processes and Continuous Improvement
A process that is broken or riddled with process defects is a very bad candidate for outsourcing. You must always baseline processes so that you develop an understanding of what you have and how you currently do it and a basis from which to measure improvement. An outsourced process, whether it is ITO or BPO, needs to be optimized across the entire delivery chain before you outsource it.
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Resource Adequacy
The key proscription here is to not attempt outsourcing on the cheap – it never pays. Remember, outsourcing is a business tool and, like any other tool, you will get what you pay for. A thoughtful and detailed analysis of required finances, people and technologies is essential in paving the way for any successful outsourcing project.
A heavily discounted investment in your outsourcing initiative will beget disappointing results, sooner rather than later. A good resource plan must account for all of the basics but also travel budgets, legal costs, contingency costs, variations in foreign exchange rates, etc. High quality resources will return high quality results.
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A Good Change Management Plan
In outsourcing, the role of change management is to explain the business justifications of outsourcing, to promote commitment to outsourcing as a valid business tool and to pave the way for the transition to and adoption of outsourcing. It is important to activate a change management plan as early as the analysis phase when the business case, requirements definition.
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Check your Readiness»
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