Written by Sean Tilbrook, Principal at PrintSync Business Solutions
I’ve been reading recently on the rise of outsourcing in Australia, particularly for small business. While I’ve long been a supporter (as well as a provider) of outsourcing services, what has interested me in particular is the rise in ‘as a service’ offerings. We’re seeing more and more services being outsourced, not just the traditional IT and Finance functions. Marketing, operations, even the basic office functions are now being outsourced.
There’s a variety of reasons behind this; businesses are constantly under cost pressure, technology making it faster and more viable to outsource and the globalisation effect that makes offshoring an attractive option, just to name a few. But with the rise in the number and availability of ‘as a service’ offerings, how do you make sure your business is ready to take advantage?
Analyse your current capabilities
In the rush to outsource, many businesses fail to really understand what level of capability they have now, and what they want from a outsource provider. For you to achieve the positive outcome from an outsourcing engagement, and to properly brief a prospective partner, you really have to understand what you’re doing today. For example, one of our prospective clients recently told me after analysing their business they no longer saw the need to own their ‘photocopiers’. After analysing their own capabilities, they felt that a print ‘as a service’ offering made financial and as well as business sense. From an IT perspective, they were ready for the right solution and we knew exactly how we could help them.
Fix existing broken processes
Outsourcing a part of your business won’t work if you’re simply looking to push your broken processes onto someone else!
You need to focus on how your business will work with the new outsource provider: for example, if you outsource your payment function without a solid, defined operating procedure around, for example capturing invoices, then you’re not fixing the problem, you’re just shifting it to someone else where it will still be broken. So take the opportunity to fix what’s not working so that you have a better chance of success in the future.
Align your objectives and metrics upfront
A recent study by the Outsourcing Center found that the most common cause of failure in an outsourcing relationship is “the buyer’s unclear expectations up front as to its objectives”. This is also the most common problem I see today: if you’re outsourcing to a ‘as a service’ provider, you need to clearly define and scope out the objectives, expectations, and performance metrics upfront. This is often an area that businesses are too loose in defining, i.e. they fail to clearly set the ground rules upfront, then struggle to achieve the outcomes they wanted from the relationship. Ideally, you should:
- Set defined objectives and outcomes: document them and agree them with your provider.
- Have clearly defined SLA’s: be clear on Service level Agreements (SLA’s); who is responsible for what, when, and how.
- Build measurable goals: make sure you have a clear measurement in place. Focus on metrics that are meaningful and will help give you a clear indication of performance.
Be prepared to review
Be realistic about your project: things will change over time and you will need flexibility from both your business and your provider to make sure you can adapt. The Outsourcing Center research found the number 2 reason for failure of an outsourcing project was that your goals and objectives fall out of line over the life of the project. Make sure you avoid this by going into the project with a defined review period and process in place.
If you take a little time upfront to work out the above points, I believe you’ll find it much easier to take advantage of the ‘as a service’ revolution.