10 things to watch out for when... Outsourcing

PUBLISHED : Sunday, 20 October, 2002, 12:00am
UPDATED : Sunday, 20 October, 2002, 12:00am

What is the point?: PCCW's recent offer to more than 1,000 employees to set up their own companies so that it can next year outsource jobs, such as outdoor plant maintenance, is a sign of the times. As the economic downturn bites and Hong Kong moves to a knowledge-based economy, more companies are looking for ways to work smarter - and cut costs and headcount.

Concentrate on your strengths: According to a recent survey from global outsourcing and consulting firm Hewitt Associates, 50.5 per cent of 424 Asia-Pacific-based firms polled said concentrating on their core competencies was the single main reason for outsourcing their human-resources functions.

Saving money: A mere 28.3 per cent of respondents in the Hewitt survey cited cost reduction as the main reason for outsourcing. Such an arrangement should be about doing things better, not merely doing them cheaper. The cheapest quote may not mean the best service.

Define the area: Analyse your business operations and focus on areas that would be best carried out by an outside party. The reasons may range from specialist knowledge to availability of technology.

Find the right partner: Maintaining your level of service is everything. Choose a partner who understands your goals and whose values are consistent with your brand. Look for quality management and a low turnover rate in both staffing and clients.

Put people in place: Ensure you have the right people in place on either side of the outsourcing agreement to maintain a good working relationship and to be the points of contact on all related matters.

Review regularly: New concerns will arise as you proceed, ranging from security issues to service standards. Address them as they arise. Do not set unrealistic goals at the outset.

Sign a contract: Work for a trial period of a few months but then draw up a longer-term contract to ensure commitment on both sides, with a formal notice period on either side to protect your customers.

Remember the upside: Difficulties emerge in any working relationship. Take the advice of global referral agency Oz Call Centres (www.ozcallcentres.com) which is to focus on solutions and not the problems that will undoubtedly arise.

Teamwork: Think of the company to whom you outsource as a partner rather than an underling. By working together on projects you will achieve mutual respect and business success.

Graphic: TRIGGBgwz