Day: May 13, 2015

Outsourcing anything can have its own share of worries ranging from cost cutting to quality. But without a doubt, outsourcing has been proven to be very beneficial. The same applies to cloud outsourcing too, and a successful, well thought-out and realistic plan can take your company to higher peaks of benefit & cost-savings. The number of benefits are plenty and to name a few, process improvements, expanded talent pools, cost containment, improved focus on core business and reduced time-to-market are essential. Even though, the benefits might seem luring enough to consider cloud outsourcing, you cannot turn a blind eye towards the inherent risks involved. An unsuccessful outsourcing project might have to compromise with the anticipated benefits. How about minimizing possible risks and maximizing the success? Just remember that no plan will give you a magical gain, you have to initiate a plan and wait for it to reap good results. The most important thing is to make a well-informed choice. Do not choose a plan only for the reason that it was successful for someone else as it might not work for you. Choose something that is perfect for your company and once you have chosen it, stick to it & follow the ten important steps below. 1. Clear objectives Before starting any kind of plan, your objectives need to be clear. A successful outsourcing strategy always begins with clearly defined objectives and measurable goals. As these objectives state the reasons for choosing an outsourcing program, throws light upon its business value and also provides a working framework of which vendor to choose, which model to use and to estimate the risks ahead, they also provide the context, which will help you to evaluate how successful or unsuccessful your strategy is. You can use these objectives as a scale to measure your performance and improve on it. 2. Realistic expectations The importance of setting realistic expectations cannot be stressed upon enough, while realistic expectations can motivate you. The brunt of unrealistic expectations can depress you. If you are a startup, you tend to decide ROI of the first year as a determinant of your plan’s success and this is the biggest blunder you can commit. Don’t be tensed by the high percent savings claimed by others. Forty percent savings or greater are rare and there are many costs like vendor selection costs, increased communication costs, redundant oversight, lessons learned, infrastructure and other “hidden” costs that will minimize your first-year performance. 3. Estimate the costs Like maintaining realistic expectations, it’s very important to estimate the costs accurately. The pressure to find a low cost plan hangs like a knife over your head but you cannot avoid certain costs. Some costs that cannot be avoided are the costs pertaining while selecting a vendor. This can take several people several months. Transitioning work and business processes, all the knowledge about the current work and the previous work need to be transferred. Maintaining of existing workforce, you can’t forget the people who are already working for you. Can you? 4. Assess your risks A risk-mitigation plan is a touchstone to check the viability of your outsourcing plan. It is not enough if you have a list of potential risks. You need to have a plan to face risks and not let them harm your outsourcing plan in an irreversible way. An aggressive risk-mitigation plan, which is thorough and well-thought-out can be time-consuming to produce & manage but it is worth to the last penny and minute spent on it. There are certain important things to consider while planning such as the impact, probability of the risk, your ability to control it and how effectively can you control it. 5. Objectivity in tracking benefits Don’t go overboard with the result estimation. Don’t show the results more than what they are just to maintain the expectations. Let the numbers tell the true story. If you have received lesser than expected, you need to find solutions to avoid these shortcomings. If you have gained more than expected, don’t underplay it. Wrong estimation of the results can be catastrophic for your company’s growth. While calculating the results, don’t separate overhead costs and project cost, as overall results matter in the end. You need to be able to find and use practices that will give you maximum results for a long term. 6. Correct outsourcing model While ensuring that all aspects of your outsourcing plan is important, choosing the correct model for your company needs to be kept at the pinnacle. When it comes to choosing the correct model, don’t jump on horses and choose something that you have heard great things about. You need to be sure that the model you choose will meet your company’s requirements, will be successful and fits your current circumstances. Learn about different models, go through its pros and cons & make an informed decision. Finally, choose one after you know its contractual flexibility, scope and distribution of responsibility. 7. Choose the right business partners If choosing the correct plan is the first step, the right business partners come right after it. The right business partners can compliment your company and make the model successful. The business partners you choose need to felicitate your objectives. Many vendors offer predefined structure of working, irrespective of how tempting it is. Don’t choose partners just at that. While trying to find a partner, ensure you follow request for information and request for process. These are very important steps. Find out about all the vendors available and then decide on who is perfect for you. 8. One step at a time Do not get into a frenzy mode about wanting a breakthrough with your very first project. Your first project needs to be treated as a way to get other projects. The beginning needs to be slow and cautious. Remember that the growth of your model depends on the success charts of the projects. Each successful or failed project is important to assess the growth of