The most obvious and visible benefit relates to the cost savings that outsourcing brings about.
You can get your job done at a lower cost and at better quality as well. Due to the difference in wages between western countries and Asia, the same kind of work that is done over there can be done in India at a fraction of the cost. There is a cost savings of around 60% by outsourcing your work to India. Plus, the quality of the services provided is high thereby ensuring that low-cost does not mean low-quality.Increased Efficiency
When you outsource your business needs to an outsourcing partner like CogNet, they bring years of experience in business practices and expertise in delivering complex outsourcing projects. Thus, they can do the job better with their knowledge and understanding of the domain. This leads to an increase in productivity and efficiency in the process thereby contributing to the bottom-line of your company.Focus on Core Areas
Outsourcing your business processes would free your energies and enable you to focus on building your brand, invest in research and development and move on to providing higher value added services.Save on Infrastructure and Technology
Outsourcing eliminates the need for investment in infrastructure as the outsourcing partner takes the responsibility of the business processes and hence develops infrastructure for the same.Access to Skilled Resources
You no longer need to invest in recruiting and training expensive resources for your business. Providers like CogNet take care of the resourcing needs with their pool of highly-skilled resources. The resources employed by CogNet are well-educated in the respective business areas and are experienced in handling the business needs of companies that want to outsource. Further, CogNet employs world class business practices perfected over the years by catering to customers around the globe. Get access to the expertise and capabilities of CogNet.Time Zone Advantage
Apart from the cost advantage, the other much touted benefit has to do with the time zone differential between your country and the location you are outsourcing to. Get your job done while you are closed for the day and wake up to your service being delivered the next morning. This unique advantage gives you the benefit of round-the-clock business operations.Faster and Better Services
Make your service offerings better with high-quality deliverables and decrease the lead time it takes for your product to reach the marketplace. Thus you would be faster in getting your ideas converted into products and better at delivering the value-added proposition.
Swiftness and Expertise: Most of the time tasks are outsourced to vendors who specialize in their field. The outsourced vendors also have specific equipment and technical expertise, many times better than the ones at the outsourcing organization. Effectively the tasks can be completed faster and with better quality output. Concentrating on core process rather than the supporting ones: outsourcing the supporting processes gives the organization more time to strengthen their core business process.
Risk-sharing: One of the most crucial factors determining the outcome of a campaign is risk-analysis. Outsourcing certain components of your business process helps the organization to shift certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist, they plan your risk-mitigating factors better.
Reduced Operational and Recruitment costs: Outsourcing eludes the need to hire individuals in-house; hence recruitment and operational costs can be minimized to a great extent. This is one of the prime advantages of offshore outsourcing.
Your organization has decided it is time to reap in the advantages of outsourcing to India, but you do not know where to start. The key in making the most of outsourcing is finding the right Indian service provider for your business. The right outsourcing vendor can propel your company to new heights, helping you cut back on cost while increasing productivity.
While you many find many vendors in the outsourcing market, you can separate the best from the rest by asking questions about communication, data security, infrastructure and confidentiality. Here is a list of questions that you can ask a service provider before signing up for an outsourcing agreement:
1. Will my data be kept secure and confidential?
Ask the vendor about what steps have been taken to ensure data privacy and security. Ensure that security and privacy is maintained at all levels such as, network security, personnel security, site security or data security. You can visit the premises of your vendor to check their system of access control. You can ask for external drives to be disabled from systems. Make sure that your data is kept completely secure by asking your vendor if they follow a system of securing data through email, file and folder encryption.
2. Do you follow quality standards?
Visit your vendor’s premises and check if quality standards and processes are followed. Find out about the measures taken to ensure utmost quality in the delivered services/products. Check with previous customer references to see if the vendor has delivered quality services/products in the past. You can be assured of quality by checking if the vendor has ISO 9000 and CMM certifications.
3. Will there be transparency in the financial matters related to my organization?
Ask your service provider for previous customer references. Call up these references and ask them if the vendor has shown fairness and transparency in the financial dealings with them. Conducting a background check on the vendor can also help. Explain to your vendor that you expect complete transparency in invoices and contracts. Tell your vendor that you will cancel the outsourcing contract if you find their financial dealings are unfair.
4. Do you follow statutory regulations and laws?
Ensure that your service provider religiously follows all compliances, laws and regulations, as by being a customer you can be held responsible for any violations of the law. Personally check all the required documents and ask your vendor to show you proof that all laws are being followed. Explain to your vendor that you will outsource only if all regulations are stringently followed.
5. How reliable are you?
Details about the service provider’s number of years in the outsourcing business, experience across business verticals, financial status and increase in number of employees can give you a good idea about the vendor’s dependability. You can also check the vendor’s trustworthiness by asking them for previous customer references.
6. Are your work ethics and culture similar to my organization?
It is important that your service provider follows a similar standard of work ethics and culture, so that there can be seamless interaction between your companies. You can visit your service provider’s premises to understand their working culture better or even hold initial trainings to help your vendor understand and follow your way of working.
7. What will be the consequences of your employee attrition on my company?
Make sure that your service provider has adequate buffer capacity and has cross-trained employees to handle employee attrition. Ensure that your vendor’s employee attrition, if any, would have no consequences on your organization.
8. Can you deliver the project within the deadline?
You must ask this question before even starting the project. Ask the service provider if he can commit to your deadline. Get information about the number of resources who will be working on your project and the total numbers of hours that will be put into your project. While meeting deadlines are important, the quality of work is even more crucial, so ensure that the vendor does not compromise on the level of quality. You can ask for daily timesheets and weekly meetings with your vendor, so that you can keep a track of the progress of your project.
9. Do you have a business continuity/disaster recovery plan?
There is always a possibility of unforeseen disasters such as hardware/software failures or natural calamities occurring. In such cases, your vendor should have a disaster recovery plan in place so that your work can be continued without any delay. Outsource only to a service provider who has a disaster recovery, physical recovery and data recovery policy. The vendor should also have other delivery centers.
10. Will my organization incur any hidden costs?
Your primary reason to outsource would be to cut back on cost, so while finding a vendor, find out about hidden costs. Check if the vendor would ask you to pay for training, infrastructure, maintenance, transition or connectivity costs. Only choose a vendor who does not charge you for hidden costs, so your company can save more in terms of cost.
Outsourcing has dramatically increased the fortunes of many companies making it an attractive business opportunity that many want to try out. While the whole concept of 'outsourcing' is pretty simple, most companies choose an outsourcing company based on only one or two factors and this very often leads to failure. In order to avoid facing an 'outsourcing disaster', there are a few basic factors that one has to take into consideration before making the decision to outsource…
1. Do the required groundwork: Outsourcing companies vary dramatically in size, infrastructure, capital, language, and talent. Make a list of the different companies and categorize them based on their plus and minus points. While factors like size and name recognition are important, the winning outsourcing vendor will have to have the right combination of the factors that best suits you and the needs of your project. It is important to remember that factors like technology infrastructure, language and talent play a much more important role in the choice of the outsourcing company than mere size and capital.
2. Start out with small tasks: It is prudent to start out your first outsourcing project with a small task. Once this task is determined, and a decision is made to use an outsourcing vendor, the task must be described in clear detail, mentioning the expectations from the outsourcing company, the objectives and all necessary details of the job that needs to be done. Once completed, you will be able to discern if there are any outsourcing problems that need to be addressed.
3. Set clear expectations: Making sure clear expectations are set before the onset of an outsourcing project can eliminate certain outsourcing concerns to an extent. Common outsourcing problems like time delays, exceeding project costs and quality of the completed work can be minimized when you choose to be upfront and clear about what you consider as good work.
4. Be prudent about paperwork: Complete all necessary paperwork before the start of any outsourcing project. Be sure that you sign all necessary security and confidentiality agreements. Also ensure that all aspects of legal issues concerning outsourcing are well covered.
5. Pay a fair price: Try to avoid mixing in a "cost-cutting focus" in your first project. It's natural to want to go on a bargain hunt, but if you find a good vendor that you can afford, don't haggle too much. Your priority here should be to pick the right outsourcing company that matches your specific need and not the one which accepts a few thousands less.
6. Be culturally sensitive: A common outsourcing problem faced by those outsourcing their first project is the differences that crop up due to disparity in culture. Since most outsourcing companies are based out of Asia, you may be required to deal with certain cultural differences. Trying to accommodate these differences can help your relationship be more efficient and pleasant.
7. Try delegating instead of abdicating: This is a common outsourcing concern faced by many newcomers. They forget that the concept of outsourcing is based on delegating and not abdicating your core and non-core activities. Delegating is a long running task that involves giving directions, controlling execution, providing ongoing feedback, and making sure that your outsourcing vendor is accountable for their actions.
8. Create a safety net: Outsourcing is a high risk activity and it is essential to have a backup plan that will take care of the situation if an outsourcing problem occurs. Creating a safety net for your project will serve the twin purpose of helping you in case the outsourcing project fails and giving you the space to act with more confidence.
9. Communicate effectively: Developing proper channels of communication is essential to the success of your first outsourcing project. In different countries, people have their own way of communicating, so it might take a little time to understand the proper way to criticize work or discern when a 'yes' means 'no' or vice versa. Also ensure that you place daily status calls to the outsourcing company to curb the growth of any unseen or last minute outsourcing problems that may occur.
10. Know when to quit: In the event of an extreme case where an outsourcing problem continues to deteriorate even with your continuing efforts to salvage it, it is better not to waste any time but to choose to terminate the project with the outsourcing company as soon as possible. This is a much better option than choosing to wait till the last minute and incurring heavy losses.
Your organization has decided to leverage the advantages of outsourcing, but you are worried about how you will be able to successfully manage a project going overseas. Proper management is very crucial to the successful completion of an offshore outsourcing project, and if managed well, you can be sure to see a marked improvement in your productivity. The key to managing an offshore assignment is following a well-laid out plan for the project from the onset of the work…
1. How to manage cost risks
Your primary reason for outsourcing is to cut down on cost, so it is critical that you should make the maximum savings in terms of cost. There are service providers, who might offer you services at a low cost, but hidden costs or the initial cost of starting the project might make you pay much more than you expected. To best avoid such cost risks, sign up with a vendor that provides services with no hidden infrastructure, maintenance or training costs. Ensure that your vendor offers complete financial transparency, providing you with periodical invoices. Analyzing the overall cost of the project and the scope of the work with the vendor can give you a clear picture of the cost of your outsourcing project even before starting it.
2. How to manage communication risks
Regular, open and direct communication with your outsourcing vendor is critical to the success of your project. Choose a service provider that has established communication systems such as Email, Phone and Chat. To keep track of the progress of your project, ask for daily updates and hold weekly meetings. Directly communicate with your vendor about any questions that you might have. Give clear instructions about how you would like the work to be carried out.
Explain that you would like your vendor’s employees to directly communicate any project queries with you. Clarify these queries immediately and provide regular feedback to avoid any setbacks or delays. To reduce communication oversights ensure that you openly and constantly communicate with your vendor.
3. How to manage knowledge transfer risks
To see a marked increase in the level of productivity, you must ensure seamless knowledge transfer between your company and your offshore vendor. Before the onset and during the course of the project, make certain that all important information is conveyed directly to your outsourcing partner. Resolve any queries that your vendor might have and create a common location where documents/ spreadsheets can be easily shared. When knowledge transfer is effectively carried out, you can be sure of a successful outcome.
4. How to manage performance risks
To best avoid the risks associated with performance, decide on a timeline with your vendor, at the onset of the project and ensure that the work is completed within this timeframe. Contacting previous customer references can give you a fair idea about the vendor’s performance and quality level. A few weeks / months into the project can help you better understand the actual performance level of your service provider. Based on this you can make adjustments, if any, to the project timeframe.
Regular project reviews and analysis of the work can help you track the progress of the project. Address setbacks as and when they arise to avoid time delays. Although time is an important factor, ensure that your vendor does not compensate for it to the detriment of quality.
5. How to manage outsourcing risks
Don’t let the risk factor stop you from leveraging the benefits of outsourcing to India. As in every project, you might encounter risks with outsourcing, and especially with offshore outsourcing but you can minimize the risks. Before finalizing on a vendor or outsourcing your work, make a thorough assessment of all the possible risks that you might stumble upon. Analyze these risks and come to a consensus of how exactly you will address them, if they occur.
6. How to manage a crisis
Choose a service provider who has had previous experience in providing offshore services. Ask for customer references and conduct a background research on the vendor. Hiring an experienced and trustworthy vendor can keep you away from catastrophic situations. Before outsourcing, analyze if your company can financially and professionally handle any unforeseen events.
7. Invest in the outsourcing relationship
Do not sign up with the very first offshore vendor you come across. Ask for past references and thoroughly conduct background research before finalizing on a service provider. Partnering with a reliable vendor can help you benefit from a long term outsourcing relationship. Mutual understanding, financial transparency, flexibility, direct communication and regular monitoring between you and your vendor can help you achieve a good outsourcing partnership. Investing in the outsourcing relationship can help you reduce cost while increasing your profitability.
8. Get your company organized before outsourcing
Before outsourcing, re-look at the way your organization works and make changes, if necessary. You can make a start by evaluating your in-house capabilities and evenly distributing work between your offshore vendor and in-house team. You can consider outsourcing non-core business functions while handling your core business in-house.
Choose a project manager or a team to monitor your vendor and address queries. Train your resources on how to effectively manage an offshore team and make the most of an outsourced project. Explain to your team the importance of communication and transparency with the vendor. Having a strong in-house management can help you successfully handle your outsourcing ventures.
Thought Leadership Articles
There are so many threats right now in the PEO industry it is probably tougher than it is ever been. There are still opportunities out there, but the threats are in health care reform, regulation changes and definitely commoditization.
Customer service as a differentiator is interesting in this industry because vendors overvalue customer service compared to what the clients tell us. Clients will leave due to bad service, but they won’t stay due to good service.
Aligning your business strategy to your market and to your customer is obviously critical to your success. So let’s talk about how it gets misaligned and why people fail at it.
It’s an interesting time for small businesses in the global economy. Big businesses have found a way to easily tap into labor arbitrage and vendors across the globe to make themselves more competitive.
CogNet’s governance begins right upfront when we are sitting down and talking about the contract and putting the Statement of Work together. We agree upon what the process looks like, what the units are going through it, what is the cost of that and how many hours will take you to that work.
CogNet’s process focus really comes from my personal experience of being in the HR services business and honestly just not having it.
CogNet delivers value in many ways. I think one of the biggest ways we do it is that my partners and I have personally walked in your shoes. For the last 20 years I have been an executive in the PEO space and the broader HR space in general. So I think our understanding – a keen understanding – of what you go through in a day helps tremendously.
First and foremost in dealing with growth you have to align with the needs of your customer, or your customer’s customer in the HR services industry.
Growing revenues in this market is probably harder than it’s ever been. You’ve got several factors working against you.
The product quality bar is where you have a diverse set of products in your company sorted by company and by product type and by client type and you define exactly what the quality target you need to hit on those items is.