If youāre wondering how your competitors sail smoothly with outsourcing ā there is no magic trick to it. Every business faces issues with outsourcing and youāre not alone ā especially if youāre a first-timer with outsourcing. But just like any other business function and every other industry, outsourcing has its share of potholes and pitfalls. But doesnāt it strike you uncanny that 78% of Fortune 500 companies outsource major business processes like Payroll, Accounting, Financial reporting Services etc.? Weāre going to reveal in this post how the biggies have aced outsourcing ā in 3 minutes.
Now that we have your precious 3 minutes, weāre going to tell you about the top 3 problems that plague the outsourcing industry by no real fault of the outsourcing provider. No, weāre not clearing the air but outlining the responsibilities of businesses that choose to outsource. More often than not weāve seen businesses walking away from the benefits of outsourcing with the āgrapes are sourā feeling. Most of such businesses have associated reluctantly with Velan but have ever since, been long-term clients of Velan. Identifying problems are the first step to overcoming them ā weāre going to help you with the former and expect you to mitigate effectively.
1. Understanding the Contract and the post-contract processes
While enrolling in a contract, not just first-timers but even old-timers may go wrong. When old-timers sometimes bring in a notion of āthis is how we worked with my last associationā, they fail to fathom what the outsourcing provider has currently outlined in the contract and worse yet, fail to communicate their granular expectations to the outsourcing provider. A few questions worth asking:
- With the new outsourcing model in place, who in the client entity are eligible to make requests to the provider?
- Does the client entity have an established workflow of sending tasks to the outsourcing provider?
- Are new software tools/systems required? Who pays for those?
- What kind of services can be availed?How to educate the client-side employees?
- How are āemergencyā change requests handled? What constitutes an āemergencyā?
When it comes to ill understanding of the contract, it often happens that both parties dig their heels in and be reluctant to bend (e.g., the client feeling āWhy is your contract different?ā& āYou have to deliver because Iām the customerā and the service provider feeling āwe are delivering everything promised in the contractā).
2. Lack of support and failing to identify a Spoc on Client side
A significant problem in outsourcing implementations is lack of support from the client side. When an implementation is underway, it is imperative that the senior management at the client side has an active role and displays sufficient buy-in into the handshake. The case deteriorates when clients fail to identify a Single Point of Contact (SPoC) who will and is responsible to communicate regularly and delegate tasks to the outsourcing provider. This results in opt-out situations and the following may arise:
- The outsourcing provider will shuttle deliveries of all tasks handed out and will be passive when the basket is empty.
- The client is unprepared when they hit a roadblock.
- Both the above cases pose a threat of āexpectations not metā.
3. A pent-up demand for services
Letās face it ā outsourcing comes along ONLY after requirements have spent a long time without getting addressed! Requirements sit right in front of you but firms donāt outsource until the requirements go from desks to their seats and start pinching where theyāre not supposed to. This can happen for two reasons:
- The client is waiting for the right kind of expertise and experience to come along in the form of a reliable outsourcing provider or organization.
- The client has designated limited funds for that function or outsourcing in general.
Both cases give rise to a pent-up demand which starts to look like a bunny being pushed through a hose when it reaches the outsourcing provider. You guessed it ā the outsourcing provider struggles to fulfill this demand. This comes last on our list because we believe the outsourcing provider has a responsibility to set realistic expectations, timelines and service agreements prior to undertaking a contract. But even in cases where the outsourcing provider has clarified these nuances, the client feels unsatisfied because theyāve simply waited too long.
We hope your three minutes were put to good use and thank you for trusting us and reading this far. When outsourcing to Velan, we understand the above and strongly believe in educating the client beforehand. Rest assured, the ābunny through a hoseā scenario rarely happens in Velan since weāre 500 employees strong and have the ability to quickly ramp up teams on short notice. We know high-volume demands like the back of our hands and have surprised many a client by exceeding their expectations.
If youāre looking to Outsourced Bookkeeping Services, Accounting, Financial Statements, Payroll, Accounts Receivables, Accounts Payables and taxation, Velan Bookkeeping can help you gain a competitive edge in the market with our steadfast and high-quality output.
Try us! Call 1-516-717-2049
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