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How Outsourcing Can Enhance the Strategic Value of Operations

Outsourcing model holds tremendous appeal for businesses, whether you embrace it as a strategic weapon, or a business enabler. Sending out projects partially or wholly enhances the strategic value for the operations, while cutting costs, thus creating a win-win situation for enterprises.

Covert Advantages of Outsourcing

Apart from the benefits that are evident, there are several other advantages of outsourcing. It pushes the internal staff to be proactive and focus on higher-value applications and services.  The process also serves as a catalyst to get your house in order, as you have to formally define and document processes, metrics and best practices.
Outsourcing facilitates round-the-clock working on projects as there is always someone at work due to time zone differences. This leads to distributed development projects completed at an accelerated rate.

Analyze Every Aspect of Outsourcing Projects

You need to factor in all relevant aspects when outsourcing for making the most of the set up. Eating half the cake makes no sense when full is available. Make sure that every single aspect is understood before moving ahead. Sort out with the service provider how the deliverables will be measured and any associated risks mitigated.

What You Need to Determine before Outsourcing

Before you get going, you need to spell clearly who owns responsibility for quality and performance – your in-house team or the outsourcer. You also need to determine the outsourced initiatives are tested and deployed to meet the same level of performance as in-house standards. If you have a mixed portfolio of in-house and outsourced projects, keep them aligned with business goals.
Service level agreements (SLAs) must be drafted diligently, avoiding inconsistencies. Provisions must be written in clear language, closing the gaps that lead to ambiguity. Treat the SLAs as the holy book of your collaboration.

‘Turnkey’ Model

Most companies prefer following the model of ‘turnkey’ service as it provides them full control over the end results. You and the outsourcer agree upon specific goals for quality and performance, along with key performance indicators. Requirements are clearly defined at the outset, making the advantages tangible for the clients.

Model Keeping Client in Tight Control

In another outsourcing model, the outsourcer handles a major chunk of the work, but the client retains responsibility for quality and performance. This model enables the client to keep tight control over the tools, ensuing consistency in validation standards. The model may work well for the projects with very rigorous requirements.

Multi-sourcing Model

Multi-sourcing model is also used by some enterprises. In this model, the client may segregate the project into several modules and outsource these to several companies. However, multi-sourcing leads to loss of control over processes and a mismatch in the outsourcers’ tools and techniques, leading to unanticipated problems. It is better to stick to a single outsourcer that provides multiple services.

Integrated Model

In integrated model, the client and the outsource share the responsibility for application quality and performance. The model requires close coordination between the client and the outsourcer. It also requires sharing critical information with the outsourcing service provider rather than simply handing over the tasks.

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