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Outsourcing Fundamentals

Independent guide to Outsourcing: BPO strategy, Service Provider selection, contracting and implementation projects. Assessing and improving your current service.

Contracting > Requirements

Clarifying requirements for going to market

This page describes the definition of the requirements and service delivery model prior to engagement with service providers. The main activities of the phase of the project are:

  1. Collating and creating a set of information defining the current situation to provide the basis for business case, requirements definition and later the contract.
  2. Defining the service and service delivery model; i.e. what you wish to buy as a service and how it will operate within your overall business processes.
  3. Designing the organisation and roles to be retained within the company after the in scope activities are taken over by the outsourced service.
  4. Developing an information pack a document with will build into the Request for Proposal, the document capturing all the requirements and conditions against which the providers will make proposals.

These are described below, but beginning with Change Management & Communications because it is too easy to leave its planning too late with unfortunate results.

Change management & Communications

In the Strategy Phase, the programme may have been kept low key, with discussions contained to a small team and the leadership. For the Contract Phase to be successful, a wider group must be involved. Change Management and Communications becomes an important topic and work stream. Note that:

  • Outsourcing is threatening to staff, with its likelihood of redundancies.
  • Activities, such as data collection, require a significant number of staff to be involved. There is no company process as efficient as the rumour mill, and any vacuum of real information will quickly fill with guesses.
  • In many countries, staff consultation must take place before there is a decision committing the company to outsourcing involving job loss or indeed restructuring of jobs. Without adequate preparation, projects can be delayed by a year while staff representation organisations are consulted.
  • Most people simply do not welcome change that is imposed.

Successful change management needs a structured approach paying attention to both the factors making organisations perform as well as those helping individuals to adapt.

  • Integrate change management into the project planning and management right from the start. Get advice from HR in all the countries affected to understand timing implications and constraints on decision making.
  • Develop a critical path for the project which includes consultation and communications.
  • Include a change management expert as part of your team at least part time.

Please review the page "Implementation > Change Management" which provides more of an overview of the actions required across the whole Contracting and Implementation process.

Current state definition

The purpose of collecting data is:

  • To have a baseline of the current state against which to compare future state scenarios.
  • To provide the information and understanding to allow the service delivery model and retained organisation to be defined.
  • to provide the foundation for development of an RFP and the contract.

The page "Contracting > Key Documents" gives a check list for Initial Data Collection". If you have undertaken a data collection exercise as part of a strategy project, you may have a lot of the data required already. The currency of some information is more important than others. For example, to avoid collecting staffing lists more than once, changes of staffing will need to be tracked and the data updated.

Defining the service and service delivery model

The Service Delivery Model is covered on page "Strategy > Delivery Model".

Designing the retained organisation

The retained organisation design can be split into:

  • staff undertaking activities excluded from the scope of services and any other roles impacted by the move to a BPO service.
  • The client organisation required for Service Management.

The Services will only be completely defined after responses to RFP have been received and any uncertainties or differences resolved. Organisation design at this stage is preliminary and for the purposes of developing service requirements and building the business case.

For the retained roles, outline the organisation to test that it will be effective and ensure the positions will be viable

For the Service Management Organisation, the page BPO Roles has a check list of operational roles for BPO. You may also wish to review the page "Implementation > Governance" to see how the governance works.