COGNEESOL

A Guide to Business Process OutsourcingA W A Y T O S U C C E S S

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03 What' is outsourcing?

4-5Factors Driving Need to

Outsource

06 Types of  Outsourcing

07Ten Common Traps of

Outsourcing

8-9 The Outsourcing Cycle

10Internal factors that can lead an

organization to consider outsourcing

include:

10 External factors that can lead an

organization to consider outsourcing

include

 11 What to outsource?

 12 The future of outsourcing

  13  References

Phase-1

Phase-2

Phase-3

CO

NT

EN

TS

WHAT I S OU T SOURC I N G ?

Outsourcing is the contracting out of a business function to a third party or company, involving the transfer of people, processes and assets. This contracting out can be commenced at either an on-shore or off-shore location, and one (Single Sourced) or more (multi-sourced) outsourcing partners.

I T OU T SOURC I N G ( I T O )

BU S I N E S S PROCE S S OU T SOURC I N G ( B PO )

IT outsourcing (as a part of an outsourcing definition) is the use of external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes.

The outsourcing of business processes that were typically performed in-house began in the early 1990s, and has since grown dramatically with the drive for reducing costs and improving performance.

P H A S E - 1 ( O U T S O U R C I N G )

FACTORS DRIVING THE NEED OF OUTSOURCING

Cost Saving Access to Resources and Knowledge Rise of Global Knowledge Workforce Focus on core Competencies Increased Superiority of IT Global Diffusion of Knowledge

There are several factors that are influening firms to consider outsourcing as a business strategy.

1. COST SAVING

2. ACCESS TO RESOURCES AND KNOWLEDGE

3. RISE OF GLOBAL KNOWLEDGE WORKFORCE

4. FOCUS ON CORE COMPETENCIES

5. INCREASED SUPERIORITY OF IT

6. GLOBAL DIFFUSION OF KNOWLEDGE

Access to Resources andKnowledge is Important

Factors Driving the Need of Outsourcing

1. Cost Savings: The main reason given for engaging in outsourcing is the cost savings. Cost saving come from the simple move from fixed to variable cost models. 2. Access to Resources and Knowledge: How an organization can accsess external resources and knowledge, rather than trying to own the resources.

3. Rise of Global Knowledge Workforce: How an organization can raise the global knowledge workforce is also an important factor that driving the need of outsourcing.

4. Focus on Core Competencies: By transferring decision rights, the organization is reducing its need to focus high level of resources on the efforts of decision making.

5. Increased Superiority of IT: As sophistication of telecommunication infrastructure and security protocols of information transmission improved, payroll work started its move overseas.

6. Global Diffusion of Knowledge: Global diffusion of knowledge is the another factor that has contributed to increase in the global outsourcing is the sophistication of collaborative technology solutions.

TYPES OF OUTSOURCING

1. OFFSHORE OUTSOURCING

2. ONSHORE OUTSOURCING

3. NEARSHORE OUTSOURCING

OFFSHORE OUTSOURCING:

ONSHORE OUTSOURCING:

NEARSHORE OUTSOURCING:

Three types of outsourcing(BPO)

BPO that is contracted outside a company's own country is known as offshore outsourcing.

BPO that is contracted with the company's own country is known as onshore outsourcing.

BPO that is contracted to a company's neighboring country is known as near shore outsourcing.

10 COMMON TRAPS OF OUTSOURCING

LACK OF MANAGEMENT COMMITMENT

INSIGNIFICANT KNOWLEDGE OF OUTSOURCING

METHODOLOGIES

LACK OF AN OUTSOURCING COMMUNICATIONS

PLAN

FAILURE TO RECOGNIZE OUTSOURCING

BUSINESS RISK

NOT DEDICATING THE BEST AND BRIGHTEST

INTERNAL RESOURCES

FAILURE TO TAP INTO EXTERNAL SOURCE OF

KNOWLEDGE

RUSHING THROUGH THE INITIATIVE

NOT APPRECIATING CULTURAL DIFFERENCES

MINIMIZING WHAT IT WILL TAKE TO MAKE THE

VENDOR PRODUCTIVE

POOR RELATIONSHIP MANAGEMENT PROGRAMS

PHASE-2 THE OURTSOURCING

CYCLE

STRATEGIS

ASSESSMENT

OUTSOURCING CYCLET h e o u t s o u r c i n g c y c l e i s a c o l l e c t i o n s

o f   f o l l o w i n g s t a g e s   s u c h a s s t r a t e g i c

a s s e s s m e n t , b u s i n e s s v a l u e a s s e s s m e n t ,

o p e r a t i o n a l a s s e s s m e n s t , f i n a n c i a l

a s s e s s m e n t a n d r i s k a s s e s s m e n t . E a c h o f

s t a g e s o f o u t s o u r c i n g h a s s u b - c o m p o n e n t s

a n d s u b - p r o c e s s e s t h a t n e e d a t t e n t i o n .

O u t s o u r c i n g m u s t b e c o n s i d e r e d a s a

s t r a t e g i c t o o l f o r t h e o r g a n i z a t i o n t o e m p l o y

t o i n c r e a s e i t s a f f o r d a b i l i t y .  

BUSINESS

VALUE

ASSESSMENT

OPERATIONAL

ASSESSMENT

FINANCIAL AND

RISK ASSESSMENT

STRATEGIC ASSESSMENT

GOALS OF STRATEGIC ASSESSMENT 

BUSINESS-VALUE ASSESSMENT:

ELEMENTS OF STRATEGIC ASSESSMENT

OPERATIONAL ASSESSMENT:

FINANCIAL & RISK ASSESSMENT:

There are four elements of strategic assessment:

• Analysis of organization's core competencies • Setting up an executive sponsor team to overseas the outsourcing projects • Ensuring that the outsourcing plan is alignment with the business overall strategy

• Understanding the nature of process • Managing critical elements around the processes • Benchmarking and Mapping organizational processes

• Elements of Financial Assessment: Direct vs indirect costs, types of costing method, current costs vs future costs • Elements of risk assessments: • Financial risk, operational risk, strategic risks and technology risks

• To develop a clear vision of outsourcing, setting tangible goals, and objectives. • To determine how outsourcing fits into the overall strategy. • To select and engage executive sponsor for the outsourcing efforts. • To identify the key functions and processes suitable for the outsourcing. • To determine whether the engagement should be onshore, near shore or offshore. • Identify risks and mitigations.

ANIMAL OLYMPIANSIf animals went head-to-

head with the world's best

athletes, who would win? p.2

EXTERNAL FACTORS:

INTERNAL FACTORS:

Emergence of new business: Before the rise of companies that did payroll processing many companies handled these tasks internally: today external businesses exist that are superior at executing the task.   Rise of qualified talent pool in foreign locations: Today outsourcing of knowledge work is also fostered by a rich and ever-expanding global talent pool of knowledge workers.  Innovation in the market place: Innovations are normally disruptive and can call for changes in a company's mode of operations. It commonly refers to changing processes or creating more effective processes, products and ideas. For business this could mean applying new ideas, workflows, methodologies,services or products for which customer will pay.                   Business-value assessment needs to look to providing supervision on how outsourcing would meet the organization’s strategic guidelines, in terms of both its proficiencies and its strategies. To do effectively will require involvement and provision from executive sponsor, a point we need to highlight time and again.

INTERNAL FACTORS:  Undesirability of certain areas or

inoperativeness in growth: An area that was once growing, even booming, and contributing to the overall business strategy, has receded to become more secondary, diverting focus from other growing areas. Maturity of certain areas: It is an area where things are in state of flux during the initial stages, but over the time, processes get systematized and becomeroutine and can be conducted in an auto mated fashion with minimal effort. Efforts to centralize a given function: An organization is trying to centralize a function that is presently separately spread out through the organization as seen in the appearance of centralized acquiring sections.  Change in Business strategies: If a company wants to upgrade a given line of products and services and  initiates outsourcing.                     Higher Costs Saving Improved performance: More efficient and effective outcomes are likely when third party can do the job better than an organization is currently doing it, and do it more economically.

FACTORS THAT MIGHT LEAD AN ORGANIZATION TO CONSIDER OUTSOURCING

(PHASE-3)

What to Outsource?

Accounting (Bookkeeping, Account Receivable and Account Payable, Bank Reconciliation)

Finance services (Financial Reporting, Payroll Processing and Tax Preparation)

Legal services (legal writing, Contract management, litigation support, paralegal etc.)

Insurance services (Insurance Accounting, Policy management, commission Management)

Data Management (Data Entry, Data Mining, Forms Processing, Transaction Processing)

Research and Analysis (Market Research and Analysis, Financial Research and Analysis)

Technology Services(Web Development, Web Designing, Smartphone Apps, Software Solutions, SEO, Internet Market)

OUTS

OURC

ING

FU

TU

RE

O

FThe future of outsourcing is optimistic.

There are numerous things that will

arise in the instant future. First, the

repercussion and economical postures

regarding the outsourcing of

knowledge work will came to an end,

because of the simple authenticity that

the economies of outsourcing outweigh

these concerns expressively.

Second, the transformation of

outsourcing considerate work, such as

software development and R&D

activities, will rise and become more

accepted. This will cover the way for

organizations to become more

comfortable outsourcing more

composite matters and matters of

greater significance, such as core

competencies.

Third, the outsourcing decision, which is

currently dominated by cost concerns,

will shift to one of the knowledge

concerns- i.e. who the expert in domain

is rather than who is the lowest cost

provider.

Finally, there will leaders and stragglers

in any given industry, based on how

effective their outsourcing programs

are. This is sure to happen as more

organizations become dispersed and

based upon variable costs rather than

the fixed cost model to meet the

characteristics of a dynamic

marketplace. So outsourcing will help

you to improve the performance of any

organization while outsourcing back-

office business services.

T H A N K Y O U

Are you thinking about outsourcing your business process outsourcing services, We

at Cogneesol, a US based business outsourcing service provider will give you the

opportunity of outsourcing business services such as accounting, finance, insurance,

legal, data entry, research and analysis, technology services, etc. for growing your

business in the proper manner.

Cogneesol will provide you the experienced team of experts to examine your

business problems and gives you the better idea of outsourcing these services to

enhance the productivity of your business.

Cogneesol a reputed business outsourcing firm will provide you the most stable and

cost-effective business process outsourcing services for your business developments

by saving the time to focus on core activities of business processes.

Why you Choose us?

• Lowering operational costs by up to 60%

• Suitable utilization of time

• Increasing efficiencies while focusing on your core business

• Providing outstanding services at economical costs

• Get access to professional staff confident of handling your back-office processes

USA: +1 646 688 2821 Email: info@cogneesol.com https://www.cogneesol.com/

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