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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.

Implementation > Overall Process

The main activities of implementing BPO Services

The work of implementing the services is executed by the provider, by the client and by joint teams. In the box to the right, I have set out some of the larger choices about how the implementation may be run, but first, I have described the main activities involved below:

  1. Solution Finalisation: Despite all the great information collected and analysis carried out in defining the requirement, the provider has to entirely replace the in scope activities and will send a team of analysts to study and document the current operations. This will involve reviewing all the available documentation and may require visits to main operational centres and work shadowing.
  2. Operating Procedures: The new delivery model design is completed and documented in detail. Since this becomes the basis for the service, the operating procedures should be fully reviewed and signed off by the client.
  3. Governance: Governance roles and processes are implemented straight away for managing the implementation. Governance processes for ongoing service management are prioritised and those required for go-live put in place.
  4. Recruitment & Training: The provider will fill a percentage of the service roles from its current workforce, but normally will need to recruit the majority from the market and train them both in the provider's work management processes and tools, and for the specific activities required to deliver the services. Keeping the period between recruitment and providing a chargeable service as short as possible is critical to the provider's one-off costs and where the transition is phased, recruitment will also be phased.
  5. Infrastructure: As well as the office accommodation, furniture, telephones and PC's, perhaps securely enclosed, the services require a set of service management tools. The provider's Call management, work flow and case management tools need to be configured for the service. Obviously, if an application such as an HRMS is part of the service, then this will also need to be set up. Where the service makes use of the client's systems (Finance, HR, Procurement etc.) then appropriate system roles and access rights need to be configured and network connections made. For some services, free-phone access to the service centre is set up from client sites.
  6. Retained Organisation: The changes to the client organisation and roles brought about by adoption of the outsourced services need to be introduced. In some cases whole departments may be merged. Individual roles may need altering and in the case of a widely accessed service, a whole range of users given new procedures.
  7. Change over: Moving from the legacy approach to the new services brings into play the processes that have been tested but not fully operated and staff who have been trained and may even be experienced in similar situations, but not specifically for this service. There should be a thorough analysis of risks and development of mitigation strategies.
  8. Stabilisation: After going live with the new services, teething problems need to be caught early and, where needed, procedures refined, or weak spots in training reinforced. Additional resource should be kept available until there is confidence in the performance of the services.

Implementation Choices

Although the decisions below will have been made as part of defining the requirements and the implementation approach in Contracting, I feel that they can be more clearly described here as part of implementation:

Transformation first, during or after transition: Every BPO implementation involves some change to the way in which the in-scope processes are executed to accommodate working at a distance and across a contractual boundary, but often the legacy has significant scope for improvement. Discussion of outsourcing often includes concerns:

  • Will an outsourcing provider just provide a cheaper version of the current mess?
  • Won't all the cost saving potential be taken by the outsourced provider?

There are circumstances when each of transforming processes first, during and after transition to an outsourced service are appropriate. To decide, consider the following questions:

  1. Does your company have the capability to carry through the changes effectively?
  2. Are there providers with better capability to deliver the improvements, including supporting changes to retained activities?
  3. Does the transformation need introduction of capability that will no longer be required internally after outsourcing?
  4. Can the transformation be introduced over a short period without disrupting the operation of the business, or does it need to be phased in?

Probably the most common mistake made is in waiting too long for internal change to succeed when outside help is required. However, when a service provider is supporting the improvement process, you still need to manage realisation of the benefits. The objective of transformation should be agreed. The way in which improvements will be driven should be defined. Where the gains are uncertain, the way in which benefits are shared must have been agreed.

Big Bang or Phased: a fast transition to an outsourced service has many advantages. It avoids working in an interim mode for a period, either with one set of users on a new process and the rest on the old way, or having to make a new and old procedure work together. Some system implementations require a single change over. However, the big bang approach is usually riskier and more difficult to do than having some phasing. Providers will normally prefer phasing in order to make best use of their resources.

Phasing basis: Examples of the drivers for planning transition phasing are:

  • Geography/country: Where the client business is in multiple countries, an implementation team can move from country to country taking account of lessons learned. The country split may also help where the process needs to be adapted to local legislation or market.
  • Business Process: If there are distinct processes in scope, then the scale of an implementation can be reduced by going one at a time.
  • Company archetype: A service can involve having a different approach for large and small companies. In this case, the scope may be split into large and small country implementation.
  • Language: Often implementation is carried out first in the client's dominant language with subsequent implementation in other languages required.
  • Link to another project: If there are other projects underway at the same time, it may be beneficial to avoid too much change for the same population at the same time.