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Choosing the right outsourcing partner: 4 critical considerations

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outsourcing partner

Outsourcing Partner – As Business Process Outsourcing (BPO) models evolve into 2021 and beyond, two key trends stand out: more business-critical functions will increasingly be outsourced, and the relationship between companies and BPO partners will become more strategic and less transactional.

These latest developments mean that business leaders will need to invest more time and effort into selecting the right fit strategic business process outsourcing partner at the start. A BPO partner needs to be well-aligned to achieving your identified business goals, such as increased productivity, enhanced service quality, and improved customer experience. Failure to view your BPO partner more strategically could increase your exposure to operational and reputational risks, and even lead to poor results – the very opposite of why you are engaging a BPO in the first place.

And as the COVID-19 pandemic has triggered a change in mindset around building an elastic workforce for better resilience, leaders are prompted to rethink the sustainability of outsourcing in a changed future. This has presented significant opportunities for leaders to reassess the cost and operational benefits of augmenting their workforce and achieving agility through outsourcing.

Firstly, however, you need to evaluate your current outsourcing partner qualifying process and ask if it is sufficiently robust to manage the challenges of an uncertain future. Much like there is a structured process for hiring a full-time employee, there should also be a detailed process for evaluating BPO partners for their right-fit before committing to an agreement. With a more end-to-end and collaborative approach to BPO partnerships, here are four things you should consider when designing and developing your qualifying process.

1. Which outsourcing model best meets your business needs?

Determining the best-fit outsourcing model to meet your defined business goals is the first critical step to shortlisting and evaluating the right outsourcing partners. While outsourcing may have once been synonymous with offshoring, that has changed. Modern BPO models have evolved and diversified to encompass offshoring, onshoring, nearshoring, or a hybrid of all three.

Traditional offshoring offers cost-cutting benefits, with different time zones allowing companies to stay operational around the clock. But cultural differences and language barriers can pose significant challenges, and geographical distance requires greater vigilance and involvement in oversight and communications. COVID has added additional complications, with countries like India being heavily hit by the pandemic. The concern of how to facilitate active management of BPO partners should be a key consideration moving forward, as having the old “set and forget” mindset toward outsourcing will pose significant risks in current circumstances.

This could be why more companies have recently been considering increasing capacities onshore rather than offshore. Onshoring may be generally costlier, but cultural compatibility, proximity and ease of communication, and opportunities for mutually beneficial collaboration make it attractive, with nearshoring as an option to find balance between the two.

2. Does your company values align with your BPO partner?

As outsourcing service providers evolve to become more integrated into a company’s long-term business strategy, it becomes increasingly important to ensure that both parties’ values are in sync. These values include your mission and vision, whether there is mutual agreement on which metrics and goals to maintain for employee engagement, retention and welfare, and attitudes toward process improvements, automation, and more.

When values are aligned, a BPO partner can effectively become an extension of your team, fuelling investment in mutual growth. This is key to facilitating transparency for continuous process optimisation and improvements in operational capabilities for better co-delivery of business outcomes. Only then will the full potential of outsourcing be realised.

3. How well do you understand their digital infrastructure and technology?

Ensuring full knowledge over your BPO partners’ operational capabilities is critical, especially when dealing with captive and non-captive offshore operations, and how they are performing against that metric. Much like when evaluating any future strategic outsourcing partner, leaders should seek to understand potential partners’ facilities, capabilities, and capacities.

Key things to consider including in your assessment is your partner’s hardware, software, systems, and security, as well as related business continuity and network redundancy plans. Are they adequately equipped for cloud-based service management and digital execution strategies, integrated across multiple digital platforms? Do they have the necessary data security, training qualifications, or ISO certifications?

4. How familiar are you with your outsourcing partner compliance processes?

When it comes to managing business compliance risk, leaders need to look beyond their organisations and consider the risk profile of their third-party service providers, including BPO partners. According to Gartner, 52 per cent of legal and compliance leaders are concerned about third-party cybersecurity and data privacy risks since COVID-19, especially as third parties themselves move toward remote work processes.

That is why end-to-end transparency is key to managing effective outsourcing partnerships. The right fit BPO partner with the right compliance processes in place will help mitigate potential concerns around keeping up with regulations, implementing effective cybersecurity protocols, and dealing with digital disruption.

In summary, ‘outsourcing’ as we once knew it has fundamentally changed in light of COVID-19. And so, leaders must also change their approach to how they view their BPO partners. No longer is a BPO a partner to hold at arm’s length and treat in isolation from your business operations.  Your BPO partners are your strategic business partners. They must be aligned with your business and have the right culture and values to meet your adequately your requirements. In 2021 and beyond, leaders need to manage their outsourcing partners more actively. And if leveraged correctly, outsourcing will continue to help companies drive operational resilience and build agility while fulfilling fundamental business needs in the year ahead.

Lead your business into a changed future with Enlighten. To explore your options, reach out to Helen Mackay, Head of Sales and Marketing at helen.mackay@enlighten-opex.com for a virtual coffee chat.

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