Offshore outsourcing is rapidly becoming a core component of corporate outsourcing strategy. There are several steps involved in creating an offshore outsourcing strategy, which are shown in the table below.
Planning the Offshore Strategy
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- Assess risks
- Announce initiatives
- Form project team
- Engage advisors
- Train the project team with latest information
- Address issues that can impede strategy planning: resource management, information management, project management
- Set objectives and goals
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| Exploring Strategic Implications |
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| Analyzing Costs and Performance |
- Measure activity costs
- Project future costs
- Measure current performance
- Measure cost of poor performance
- Benchmark costs/performance
- Determine specific risks, asset values, total costs, pricing models, and goals
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| Selecting a Vendor |
- Set qualifications
- Set evaluation criteria
- Identify providers
- Screen providers
- Draft RFP
- Evaluate proposals: qualifications, costs
- Perform due diligence
- For each proposal determine "Buy" total costs,
- Shortlist providers
- Review finalist provider with senior management
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| Negotiating the Contract |
- Plan negotiations
- Address high level issues and deal breakers
- Negotiate contract: scope, performance standards, pricing schedules, terms and conditions
- Prepare service level agreements
- Implement internal communication plan
- Announce contract
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| Managing the Transition |
- Adjust team roles
- Define transition plans
- Address transition issues: communication, human resources, other factors
- Meet with employees: organization and vendor
- Make offers or begin terminations
- Provide counseling
- Physically move
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| Governance |
- Adjust management styles
- Create governance council
- Communicate, communicate, communicate
- Define and design reporting: meeting agendas, meeting schedules, performance reports, dashboard reports, reporting schedules
- Measure performance
- Confront poor performance and improve performance
- Relationship management - build the relationship
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