Offshore Outsourcing Process

Offshore outsourcing demands extreme caution. In offshore outsourcing clients are depending on another entity to carry forward their business methods or business process. Clients do this exercise- because in a particular business activity they are at a lesser advantageous position then their partners, to whom they outsource their business process.

We have attempted to give you an insight into the process of offshore outsourcing and tried to answer the question: How to outsource?

The process of offshore outsourcing starts from client’s need recognition and ends with the end of contract.

1. Know Thyself First
   
   The primary goal of outsourcing is to gain business benefit by handing over a part of a business responsibility to someone who is expert at handling it. This stage of offshore outsourcing process demands self-assessment. Organization should know which activities are consuming more resources? What is the importance of these activities and what business profit would be earned if it were outsourced? The client or the buyer should be aware of the effects of each component of his business and should come to a decision of what and how to outsource. Generally, clients outsource activities that are of non-core and concentrates more on core activities.
   
   
   A client needs to specify the technical and managerial aspects, which is required in a prospective provider. If the self-assessment exercise reaps success then outsourcer would come to know various offshore outsourcing options available in front of him. Moreover he become aware of his non-core business activities and accordingly decides the profile of a prospective service provider.
   
   
2. Request For Proposals
   
   When outsourcer is clear about what he wants, he moves on to search for the service providers. Request for proposals (RFP) is an invitation to all those service providers who are mapping with client’s pre-decided criterions.
   
   RFP’s should clearly specify what are the requirements. Clearer a client is in his RFP’s, more prospects of him getting right kind of service providers. Client can create an environment of healthy competition to get better outsourcing options.
   
   
3. Examining the service provider
   
   An RFP will make service providers to approach the concerned buyer with the required information. Buyer now needs to analyze all the answers and choose a handful of likely contenders. It is advisable to measure all the providers on a common scale. Measuring standards would depend on the type of industry and the type of offshore outsourcing one wish to carry out.
   Read about Global delivery models used in software offshore outsourcing....
   
   Client should not forget to pay special attention to the financial characteristics. It is natural that a buyer would make efforts to calculate the cost savings from an offer. But it is also advisable to look into the other financial indicators like industry rating, stability, future prospects etc before you come to a final decision.
   
   Factors which client may consider for service provider evaluation> may range from analyzing companies vision to employee and technology competence of the service provider. This would include a review of the provider's new approaches in training like investools and other applications.
   
   
4. Choosing a partner
   
   The previous stage would help a buyer in focusing his attention on few prospective offers. Now, in this stage he chooses one from them and gives his final judgment. Security, Confidentiality and Ethics of the service provider can be one of the considerations, which outsourcers could analyze before finalizing their decision. Experts in this field advice outsourcers to reconfirm their assessment by seeking clarification on any doubts.
   
   
5. Finalizing Contract
   
   A final shape is given to a decision. Contract is a legal agreement between a buyer and the service provider based on certain terms and conditional.
   It is in interest for both the outsourcers and the service providers to write a contract in the presence of learned legal personnel.
   
   A contract should be absolutely clear in all respects.
   
   There should not be any scope of misunderstanding. Offshore outsourcing industry is facing many business related legal issues. It is imperative to define provisions regarding the settlement of such issues so as to establish a healthy and sustainable relationship.
   
   
6. Measuring performance
   
   Process of outsourcing also contains constant review of performance. Output is always measured on certain pre-decided benchmarks. Benchmarking standards and methodology should also be mentioned in the contract. Experts feel that a client should maintain a constant check on his service provider and derive means to make him accountable for his output.
   
   
7. End of Contract
   
   If all the steps are successfully implemented then the outsourcing deals gets better chance of bringing in success to buyers business. On successful completion of the project, the contract comes to an end.


It should be remembered that the new challenges would feature with every new outsourcing contract. But a systematic approach of outsourcers in deciding their outsourcing partner will reduce their overall risks. Information secured from each offshore outsourcing contract can make outsourcer achieve desired business results while maintaining standards in his business methods and process. The nature of outsourcing deals will decide the execution methodology of the above-mentioned steps. How the concerned client or outsourcer deals with the process and which outsourcing methods he follows, is his discretion.