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FAQ

Q1. What is Outsourcing?
A. Outsourcing can be defined as "the strategic use of outside resources to perform activities traditionally handled by internal staff and resources".

Q2. Why should organizations Outsource?
A. The key reasons why an organization should outsource are:

Reduce and control operating costs
Improve host company focus
Gain access to world-class capabilities
Free internal resources for other purposes
A function is time-consuming to manage or is out of control
Insufficient resources are available internally
Share risks with a partner company

Q3. What can an organization outsource?
A. The list of functions that can be outsourced is long. Among other activities the key functions that can be outsourced are the following:

Transaction management
e-CRM (electronic Customer Relationship Management)
SCM (Supply Chain Management)
Back Office Processing
Payroll
Billing
Forms Processing
Data Entry
Accounting
Web solutions
Web development
Web design
Website security
Website maintenance
Web hosting e-commerce: B2B, B2C and C2B
Telemarketing and Call Centers
Tele-servicing and Product Support

Q4. Who should an organization outsource to?
A. Selection of an outsourcing partner should be based on thorough research of the organization's capabilities and credentials. Key areas to be focused on while selecting a partner are:

Domain Expertise
Production and support processes
Infrastructure
People
Training Capabilities
Client Testimonies

Q5. Why do certain outsourcing projects fail?
A. Certain outsourcing assignments fail due to the following reasons:

Lack of managerial support and active interest from the Top Management of the outsourcing organization
Lack of clearly defined roles before the commencement of the outsourcing exercise
Lack of a comprehensive transition plan
Lack of clearly defined service level agreements

Q6. What are the critical success factors of outsourcing?
A. The following have found to be the critical factors for a successful outsourcing relationship

Ensuring Top Management support of the outsourcing organization
Communicating outsourcing objectives to all employees
Assigning an outsourcing champion to manage the outsourcing exercise
Keeping the lines of communication open between the vendor and the company
Clear establishment of the levels of service expected from the vendor
Clear definition of the roles that would be played by the vendor and the company
Developing and adhering to a comprehensive transition plan

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