To Outsource or Not to Outsource, that is the question …

 

Business Process Outsourcing (BPO) is achieving strategic value through outsourcing a process and creatively examining and re-engineering the way that process is performed.  BPO is widely being accepted as a strategic management tool that organizations around the world are leveraging to improve process level efficiency and effectiveness, as well as reducing costs.

 

From a strategic standpoint, who should have responsibility for the success of outsourcing activities? Typically, the Chief Financial Officers (CFOs) are increasingly being tasked with this responsibility.

 

But as CFOs have this responsibility, what are the key activities in this process and what should they focus on?

 

The CFO needs to determine the following outsourcing responsibilities:

 

1)       Identifying current and future processes ripe for outsourcing

2)       Organizing the Request for Proposal (RFP)

3)       Selecting the outsourcing partner

4)       Managing the on-going business relationship

 

The key elements a CFO should focus on in order to successfully outsource are the following:

 

1)       Business Function Specialty: You should choose a outsourcing provider which its core competency is in the area of the process you are outsourcing and has a track record in the process  you plan to outsource.

2)       Service Level Agreements(SLAs): SLAs should be collaboratively defined determining clear performance expectations and having a method to resolve any differences/nuances not covered in the original agreement.

3)       Open communication: Outsourcing partners need to meet regularly to review performance against established service levels and discuss future changes to processes.

 

SCG can help you choose and evaluate processes to outsource and steer you away from pitfalls to maximize the benefits of outsourcing without unexpected surprises.