Outsourcing and Reputation

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February 2nd, 2010
Outsourcing has become both a popular and unpopular word in the last decade.
For those not involved in business processes, outsourcing has grown into an industry. This global industry has over 100,000 companies employing millions of people and still growing at 25 percent a year. Although outsourcing has still not hit maturity, business is starting to prompt for “what’s next?”
Outsourcing has been capitalizing on the economies of “scale” and “specialization” using telephony and computing tools to extend global positioning. The move to gather people in “like processes” and restrictively manage the result is cost effective. Commercially, we identify like processes (customer inquiry) (order entry) (manufacturing) (help desk) (business development) and deliver results from almost anywhere in the world. Commerce adopted this approach to increase profits.
There are secondary metrics.
Toyota found out that although the process could be outsourced, results and reputation are not delegated. The recall of 2.3 million vehicles in North America will impact more than current financial statements.
Events like this will evolve outsourcing and push harder on technology and process to deliver the existing bottom line results but also include “additional” responsibilities of to-day’s much more concerned business management community. So in line outsourcing will be an evolved state of outsourcing. Business will continue outsourcing to protect bottom line results since markets continually demand more. However just having an outsource vendor will no longer be enough to guarantee winning. New management requirements and responsibility will change the complexion of acceptable processes.
Although outsource is the removal and delegation of a process to a specialized company, management of results and reputation are not delegated. The outsourced process added efficiency. That improvement will stay. But more will have to be accomplished to advance. Business needs to put all the benefits of outsourcing in the bank and maintain this advantage while simultaneously mitigating risk.
Customer satisfaction, quality and company reputation remain a management mandate. Outsourcing goes beyond delegation for financial impact and is now a more complex objective. So the process must expand to include all stakeholders of all the organizations – company departments, vendors, competitors, regulatory bodies and customers. Managing “costs only” are not enough.
Outsource vendors will have to open processes to client’s continual review and access to information in a real time environment.
Outsourcing demanded that vendors provide lower costs. Technology enabled remote outsourcing. Outsourcing in the future will demand lower costs and management visibility. Communications technology will provide ” remote process control” with management visibility. Business will continue outsourcing or “delegating” the process, but they must develop integrated accountability channels.
            Companies using outsourcers will  position themselves to deliver critical information transparently through the outsourcer supply systems. The outcome will expand from process efficiency to commercial efficiency which encompass the total business cycle. This will be a knowledge base advancement capitalizing on real time information sharing. This action based knowledge will be handled seamlessly  and not buffered or deflected by independent outsourced processes.
This decade will drive outsourcing integration with customers.
Lee Carey | Founder | Outsource Oasis (outsource services)
www.outsourceoasis.ca | outsourceoasis@sympatico.ca | 613.227.1243

Tags: business

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