Self-Assessment: Are You Ready for BPO

In your industry, are margins getting slimmer and have you had to make up the difference through cost reduction? If you said yes, then you are a candidate for outsourcing.

Although there are numerous benefits to outsourcing, BPO is not for everyone. It is critical to conduct an upfront assessment to evaluate the positives and negatives of outsourcing. Understanding and articulating what you want to do and what you need from a potential outsourcing partner is the first step.

Outsourcing resembles marriage. Everything is great when you are dating, but once the marriage begins and the honeymoon is over, problems arise. Finding the right partner in an outsourcing arrangement is critical. Just like marriage, no one wants to see the relationship end in divorce.

Contract negotiations are an important step for avoiding problems downstream. All services and costs must be clearly defined so that both parties have the same expectation about what services will and will not be included in the outsourced agreement. In defining the service level agreement (SLA), it is important to discuss objectives for the project and measurements of success. Without defining SLAs and key metrics up-front, confusion could arise about responsibilities.

Some of the expected risks from outsourcing are less contact with your customer, lowered service quality, the possibility of valuable data falling into competitors' hands, the potential for the cost of outsourcing to exceed expectations, and the erosion of in-house knowledge.

The bottom line:
BPO is a strategic business decision that has long-term implications. Most outsourcing contracts tend to be multi-year agreements. Companies that take a knee jerk approach to BPO will not see the benefits that they were expecting.