Most of the issues with sub-par or failed outsourcing endeavors can be attributed to a few pitfalls. These can be avoided if the Transition Manager constantly re-focuses attention of all involved towards these.
1. Inadequate investment and sponsorship – Most sub-par outsourcing contracts are a result of not having adequate buy-in or engagement from the senior management. When this is the case, Outsourcing is done not within the context of a well thought out strategy, but as a means to achieve short term cost saves by middle managers. This prevents an organization to extract optimal value from its partnership with the outsourcing company, or to utilize outsourcing transformational potential.
Such unsuccessful outsourcing attempts build further resistance and an opinion in the business managers that ‘it doesn’t work’, and prevents future outsourcing attempts.
2. Outsourcing only the routine or the mundane – Most of the companies make the mistake of the outsourcing only the routine or mundane tasks. While this may be good for a start when the company is testing the waters and getting familiar with the vendor, mundane tasks drive the attrition rates in the offshore teams through the roof. Thus, as a part of the outsourcing strategy, the company must also look at outsourcing higher-value functions to the team. Not only will it result in increased cost saves per FTE, it will also enable better utilization of the knowledge base developed by the offshore team and reduce attrition.
3. Cutting corners in training – Often, business managers and donor teams don’t want to make the extra time from their day-to-day responsibilities to create extensive procedure documents, flowcharts and other training aides. Also, there is a tendency to conduct training in the shortest possible time, and it focuses on the process (the ‘how’ of the task) alone, not the rationale (the ‘why’ of the task). Because the entire offshore team would comprise of employees that are not only new to the culture of the organization, but also to the systems and the process, significant time and effort needs to be spent training them before they can be expected to perform the task themselves.
One good example of training that doesn’t work is remote training. With real time file-sharing, screen-sharing technologies and video conferencing it is now possible to train a large team in Bangalore from New York. However, the Transition Manager should be careful in evaluating what training can be done remotely, and what cannot. When processes are simple, remote training may work well (Eg: training for Call Centers). However, complex processes would require a mix of in-person and remote training (Eg: training for Financial Reporting).
4. Unclear roles and responsibilities – When the roles and responsibilities of every team that is involved are not clearly defined, there is a increased risk of things falling through the cracks. Clarity of roles and responsibilities to the lowest detail possible would enable fixing or clear accountability and ownership of the process.
5. Not retaining the experts – even when the new team is up and running, there is a need to retain some Subject Matter Experts (SME) in the process, to help them tackle complex or infrequently occurring issues. SMEs are needed to provide expert guidance while the team gains the necessary knowledge and sense of the process that comes from experience. SME also play the important role to monitor the team performance and identify issues as they arise. In many cases, SMEs are also assigned strategic re-engineering tasks that could not be done earlier due to lack of time.