Virtual Assistance - ALD Group

When we talk about outsourcing, traditionally we refer to hire another firm to perform certain tasks for us: tasks that make our business but not the core business.

This concept is based on the fact that with the high quality requirement demanded by globalization, no company can "do everything" totally efficient, and that there are a number of activities or processes that have nothing to do with the core business, that could be done by others more efficiently and economically. That is to say that what is derived is the achievement of certain internal processes, extremely necessary for the operation of any company, but do not make the fundamental task of the company.

According to the company and the activity for which it engages, some activities that normally are subject to outsourcing are logistics, administrative tasks such as billing; selection and training of staff; some production processes such as maintenance of physical assets; some marketing actions such as advertising or market research, and general services such as security, cleaning, catering services and so on.

It is important to define what are the strategic themes that add value, which should be maintained within the company, and what can be delegated. When outsourcing is well done, offers enormous benefits in terms of efficiency improvements, cost, etc.. It would allow the company to focus on doing what really does well.

More than one variant.
At present there are several ways to outsource a service or process, which we call "in company", "near shore and off shore."

The modality "in company" is to accommodate, within the company itself, a team of people who carry out the service. A clear example is in the cleaning sector or access control.

The so-called "near shore" is to derive the completion of a certain task to other company, which conducts its own office; the simplest case is an accounting bureau which performs billing and / or other administrative tasks for others.

And finally, thanks to the extraordinary development of communications, today it is possible to outsource work in companies that are outside your country, in what is called outsourcing "offshore". In the computing area, for example, at the international level have been positioned as concerning varios Latin American countries like Argentina, Brazil and Mexico, and others as distant as India or Ireland. But many firms, which initially led some of their processes to companies in India for example, found some unsuspected difficulties. Despite the high professional level there were some difficulties such as work culture, the time difference and the distinctive character or even the accent in English, were barriers to the long term work with companies from other countries.

In this regard, it should be noted that Argentina has a number of comparative advantages that position it in the ideal place to be a center of technological support from foreign market: the proper level of education provided by local universities, the profile of graduates -- middle class, many with a strong level of English-and a great vocation of service.

When should you outsource?.
There are occasions when the company prefers to manage their areas of operation in-house, for example in the field of administration or HR. But you should just award a lot of resources to solve the issue, to have specialized staff, acquiring software-and hardware-sometimes, desks and other furniture, train its people, and if necessary implement different strategies such staff motivation and loyalty.

We must add to this, some difficulties that do not make the work itself but have an impact on it, as it is sometimes difficult to find the adequate staff, or very it is too expensive to keep it updated in existing regulations or standards the company intends. Precisely, one of the risks of carrying out such tasks in-house is that it does not result in good quality, or to optimize the performance level and still be allocating more resources, whether in training or infrastructure.

When you outsource this type of activity, to a company specialized in this task you can reduce and control costs, obtaining an efficient and updated service, freeing those resources so that the company can focus on the core business.

In the area of technology specifically, some of the reasons that many companies decide to outsource operations is that they are "dismantling" its internal structures of technological support. For example, the decision to address a redistribution of resources, the maturation of the technology (and thus itself is quickly outdated and very expensive update), the changing role of the service, professional and higher expectations of course, also the need to address a reduction in costs.

But if the company selects a supplier to outsource a service only by a matter of costs, may be committing a serious mistake.

You should outsource a service, when your are looking for:

1. improving efficiency in the results
2. release resources to re-assign them to the the central tasks tof the company.
3. Place the focus on "core business"

The risks of outsourcing.
The outsorcing should be seen as a much more complex than it seems, as if not handled in an appropriate manner can generate a series of problems.

Firstly, it is very important to outsource a task but not the strategy, or control.

The company must always bear in mind that "the responsibility is not delegated," and that should be their decision what tasks or processes to delegate, how they should be made, and how to monitor compliance. This means that the strategic role and control should never be delegated.

Then, it is essential to define as precisely as possible (first in-house and then in the contract), which tasks or areas will outsource.

In this aspect should participate especially those who know the subject in depth, so to behold in the contract potential problem areas, which can generate a range of "hidden" costs.

Here is an example. It was decided to outsource logistics of a product of mass consumption. But the contract does not include any mention of the products will be returned by breakage of packaging, maturity, etc.. And as a result, the company must take charge of collecting "returns", or pay a premium to the company that has contracted.

In drafting the contract should participate people in charge of the area (that is who knows the topic in greater depth, and can not leave sections of loose ends), and also those responsible for all other sectors that will be affected by outsourcing, as Human Resources, Procurement, Legal and Administration, and of course the General Director of the company.

Moreover, in many cases have occurred in outsourcing operations or processes, for mismanagement, rather than improve organizational performance has been worsened. We know of cases with loss of control of the process, high costs, poor service and problems with the supplier. So there must be a very fluid communication link between the two companies, and a great compatibility in business policies.

Finally, we note that in defining what is going to outsource, we must analyze carefully how they affected the overall processes of the company. For example, if you outsource the billing process, should be seen if this will impact in the area of collections.

The contract.
The outsourcing contract must clearly indicate:

1. the extent necessary
2. how to measure and monitor the implementation of the task
3. how they conduct the exit, if problems arise
4. how to provide the necessary amendments (ie, under flexibly to changes)
5. development of the service itself, that is, how it will be carried out.

In conclusion, we can say that if the company has made clear what tasks to outsource, executes all the control, select the vendor based on criteria of responsibility and experience verifiable, and overturn the contract parameters necessary, will provide benefits outsorcing very specific: a job well done, and lower costs.

by Alberto Morelli, Director of Crystalis Consulting, www.crystalisconsulting.com

Tags: Outsourcing, outsource