Business Process Outsourcing: A life raft for businesses striving to stay afloat.

Today's global economic crisis is creating untold challenges for businesses in all industries, in all corners of the world. Business leaders of large and small companies alike are struggling to weather the storm that is affecting the survival of many once solid companies. With no safe harbour in sight, it is time to sort out how to stay afloat.

During severe economic dislocations, businesses almost always turn their attention to their largest expense item - people. Rapidly trimming the workforce, even in countries with strong employee rights legislation, is generally the automatic survival reflex. But even in the midst of an economic storm, smart companies must keep the implications of their short term actions in context.

More often than not, major reductions do not position a company for growth after the skies have cleared. Because of the immediacy and pervasiveness of the layoff process, it is hard to avoid throwing the muscle, that is talent, overboard along with layers of suddenly unnecessary bureaucracy. And those who are left behind are often so demoralised that productivity dips drastically.

There is, however, an alternative to large-scale, aggressive across-the-board layoffs, one that enables businesses to rapidly lower costs and sets the stage for future growth and expansion. For executives struggling to keep their companies afloat, Business Process Outsourcing (BPO) can prove to be a life raft for survival, and a platform to thrive after the storm is over. Outsourcing business processes is not a new corporate strategy. If implemented properly, BPO can be a fast and simple tool to help a company survive a downturn and then to thrive when the economic climate calms down.

Eight simple rules to smooth the path of outsourcing

In good times, the outsourcing of business processes can take a year or more to go from initial concept to implementation. However, in today's environment, time is the enemy; the process can no longer be linear.

1. Ensure BPO is a CEO priority

In uncertain times, sponsorship for critical initiatives such as BPO must come from the very top of the house. Otherwise, the imperative for outsourcing is not taken very seriously, and management sees implementation as optional, easily finding ways to opt out, with arguments ranging from “outsourcing never works, we've tried it,” to “the process is too critical to outsource” to “I have to implement new systems first.”

2. Approach outsourcing with an open mind

The BPO industry has moved well beyond volume-based voice and data work into highly complex industry and insight processes - think securities trades, claims management or marketing analytics. One picture is worth a thousand words - getting on a plane to India or The Philippines or Romania will help executives experience first hand the rapidly increasing sophistication of work that is
migrating offshore.

3. Keep it simple

Speed to cost reduction with no diminution of quality should the first and foremost objective of BPO as a survival tool, or implement new enterprise technology, or put in the latest bells and whistles - it's time to get the cost out - fast. This does not mean that changes in workflow, or standardisation of processes which can be accomplished during transition or shortly thereafter should be off the table. Keeping it simple means being realistic about the aspirations for the program in times of economic uncertainty, focusing only on obtaining the benefits that truly matter.

4. Move fast

Companies can move fast on their outsourcing programme by mandating aggressive timelines across the board. If moving quickly to implement BPO is not seen as vital to the basic survival of the company, it will not produce the desired results. Imposing  deadlines for the development and implementation of a roadmap, including scope, provider selection and transition will mobilise the organisation.
 

5. Empower an internal outsourcing czar, and put top talent on the case

 Survival programs are always led from the top and centre. As evidence of executive commitment, the appointment of an outsourcing czar with the right level of responsibility and authority is critical to success, This must be someone who is fully accountable and is committed full-time to the success of the program, has organisational respect, knows how to exercise authority, is not distracted by other responsibilities, is a good politician and has a personal incentive to succeed.

6. Develop a realistic deployment plan

Even when outsourcing is being implemented for cost, a measured, tightly sequenced but rational program that meets milestones and is not disruptive to the business has a much greater chance of success than an all hands on, sprint-to-the-finish program. In their haste to cut out more cost, companies at times push for or buy into an unrealistic transition roadmap.

7. Insist on alignment

Outsourcing can mean a massive dislocation of culture, resulting in a tug of war between client and provider. When new people and processes are introduced into the equation, dissonance naturally occurs. The provider must understand what values are important to the client and adjust its working style accordingly. Second, the provider must design its deliverables to support the client's needs. And last, the provider must understand that the scope of work is out of date the day the contract is signed. Flexibility to meet ever-changing business needs in this economic
climate is imperative.

8. Debit budgets in advance

This little trick obtains commitment where it counts - in the budget process. Building BPO savings into the current year's budget in advance ensures that managers have no excuse but to be committed. to the implementation of the BPO program or find some other way to get the cost out fast. Truth be told, short of cutting staff to the bone, there is rarely another way.

 

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