Outsourcing Tips - When hiring or working with an outsourcer, follow these guidelines:

• Try fixing whatever's not working on your own first. You may have internal resources that can work better than you think.
• Carefully evaluate what really can be outsourced. Generally, projects that require team interaction or brainstorming don't work too well. Self-contained tasks or projects are more suited to outsourcing.
• Put in the time and effort, upfront, to find the specific expertise you need.
• Consider management costs. Sometimes services look good on paper but you end up eating the savings in training and oversight costs.
• Be prepared for challenges. It takes a while to build the relationship and synchronize the timing.
• Don't walk in blind. Start with some paid consulting, if need be, so you can ask the right questions in choosing a vendor and keep knowledgeable tabs on performance.
• If you outsource significant hunks of your operations, consider having a staff employee(s) to act as a liaison. You want to outsource functions but not accountability.
• Watch out for hidden costs. These may include paying layoff-related expenses, overtime costs for remaining employees who may now have more work to do, and telecommunications costs for remote workers.

Best BPOs / Top 10 BPO companies

1 IBM Global / Daksh
2 Accenture
3 Hewlett Packard
4 MphasiS
5 Ernst & Young/Capgemini
6 Wipro Spectramind
7 ICICI One Source
8 eFunds Global Outsourcing
9 Convergys
10 Affiliated Computer Systems

Want to survive? Outsource!

More aggressive outsourcers are aiming to create radical business models that can give them an edge and change the game in their industries. Old-line multinationals see offshoring as a catalyst for a broader plan to overhaul outdated office operations and prepare for new competitive battles. And while some want to downsize, others are keen to liberate expensive analysts, engineers, and salesmen from routine tasks so they can spend more time innovating and dealing with customers.

"This isn't about labor cost," says Daniel Marovitz, technology managing director for Deutsche Bank's global businesses. "The issue is that if you don't do it, you won't survive."
The new attitude is emerging in corporations across the US and Europe in virtually every industry. Ask executives at Penske Truck Leasing why the company outsources dozens of business processes to Mexico and India, and they cite greater efficiency and customer service. Ask managers at US-Dutch professional publishing giant Wolters Kluwer why they're racing to shift software development and editorial work to India and the Philippines, and they will say it's about being able to pump out a greater variety of books, journals, and Web-based content more rapidly.

Ask Wachovia Corp., the Charlotte (N.C.)-based bank, why it just inked a $1.1 billion deal with India's Genpact to outsource finance and accounting jobs and why it handed over administration of its human-resources programs to Lincolnshire (Ill.)-based Hewitt Associates.
It's "what we need to do to become a great customer-relationship company," says Director of Corporate Development Peter J. Sidebottom. Wachovia aims to reinvest up to 40% of the $600 million to $1 billion it hopes to take out in costs over three years into branches, ATMs, and personnel to boost its core business.

-Pete Engardio, BusinessWeek

Golden rule for BPO success

New Delhi, Feb. 1: The country’s software services and business process outsourcing (BPO) companies can realise $60 billion in export revenues by 2010 if they reduce operational costs and improve profitability, the National Association of Software and Service Companies (Nasscom) has said.

India is now the leading destination, having captured 65 per cent and 46 per cent of the global offshore IT and BPO markets respectively.
“As the market leader, it is imperative that we continue to set standards for the global industry. IT and BPO centres in India must now provide additional benefits such as speed, flexible operating models, innovation and productivity enhancements, which can be achieved by excelling in operations,” Nasscom president Kiran Karnik said.

outsourcing contract questions, why you want to buy bpo?

Outsourcing contract? You should be able to tell your prospective vendors:

What you want to buy;
How you want to measure results;
How you plan to manage the relationship;
The price you want to pay.

Protecting Buyers In A BPO Contract

Business Process Outsourcing (BPO) can give companies a decided advantage in today's marketplace. However, four legal issues have the power to derail an outsourcing contract's success. If buyers include legal protections in their outsourcing contracts, they can enjoy the advantages BPO outsourcing brings, according to attorney David Pace, a partner in the Dallas office of Arter & Hadden LLP.

BPO is growing because companies want to focus on their core businesses. Pace says there is a growing sense in today's marketplace that companies need to shed their ancillary processes. "Then they are not distracted from focusing on what they do for a living," he says.
BPO also provides an accounting advantage. If a buyer sells its plant and equipment to the outsourcer, these items disappear from the asset side of the balance sheet. Now there's no need to depreciate them over a number of years. Instead, these costs migrate to the expense side of the ledger as a cost of goods sold. Companies can deduct these expenses in the year they were taken, if it so chooses. Pace calls this "financial engineering."

Outsourcing a process also means the buyer no longer has to manage the head count. This is an attractive benefit in today's tight labor market. The unemployment rate in May was 4.1 percent. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialized knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.Outsourcing a process also means the buyer no longer has to manage the head count. This is an attractive benefit in today's tight labor market. The unemployment rate in May was 4.1 percent. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialized knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.

source and full story:
http://www.bpo-outsourcing-journal.com/jul2000-legal.html