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Managing Outsourcing Risks |
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| First things first - outsourcing is more than technical capability of your vendor! |
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| As offshore outsourcing is becoming a reality for many businesses, the risks associated with offshore outsourcing also coming into play. The only option is to learn to manage them and retain the full advantage of outsourcing and make it a win-win strategy of your organization. |
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| Outsourcing in general and offshore outsourcing in particular continues to be a key part of many companies' supply and cost management strategy. The strategy has proven to be effective, but brings with it significant risks that must be recognized and managed. In outsourcing, you are relying on someone else to run a certain business function, if not appropriately managed; outsourcing could negatively impact your customers and operations. |
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| Since outsourcing is likely to be an ongoing process, burying the head in the sand is not an option. Managing risks, overcoming barriers and building bridges will be rewarding to managers and contribute to the bottom line of its business. |
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| Normal outsourcing risk factors |
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Capabilities of vendors |
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Cultural differences |
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Geographical time differences |
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Retention of resources |
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| Mismanagement or failure on any count could lead to. |
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Delay in project execution |
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Increased project cost |
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Issues in project coordination and management |
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| How can I manage my outsourcing risks? |
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| One of the key undocumented results of disastrous project is bad chemistry between people. You would not need or expect this if robots did your work, but yours is a living project managed by humans. There is no matrix to measure chemistry, attitude or flexibility, but these are critical to the degree of success and benefits you glean out of your relationship with your vendor. Do not disregard the 'vibes' your and your counterparts feel. |
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| As a manager, you need to plan and manage the new relationship you are getting into. Do so proactively. Think outside of your current setting. |
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| On the surface, most vendors appear to be technically competent, and they could well be. After the customary technical review, facility and capability reviews, look for nuances that can make the difference. |
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| Events to expect |
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| Like in any relationship, there are things you need to be prepared for; managing these appropriately can prove rewarding. |
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| Culture: |
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| The American business culture is result and reward oriented; many Eastern cultures are relationship oriented. There is a Japanese proverb that says " One kind word can warm 3 winter months ", and many people in the eastern cultures will endure much for a kind word! Refrain exhibiting in-the-face New York attitude; instead convey your ire firmly and professionally. |
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| Language: |
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While you team may be English speaking, they may have limited proficiency. First you need to be comfortable that Key Account Manager knows what you ' mean ', and regularly communicating with the team members will lead you to find out what they ' understand '. If the language gap is severe, terminate the relationship because it will lead to failure of the project. |
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| Miscommunications: |
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| Articulate your concepts and expectations clearly. You may need to reiterate these but without getting irate. Remember, the geographical and environmental differentiators are the ones that made the relationship possible, and gaps are inevitable |
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| Delays: |
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| Small delays in technology executions are inevitable, so monitor your projects in a manner that these are caught early on. Do make it known you are not happy about these and display your satisfaction when something is done right and on time |
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| As a result of above, failures are possible, and they are a fact of many outsourcing deals. This will test your mettle, your capability at managing and your vendors' true proficiency. |
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| How Infynita Inc can help mitigate outsourcing risk? |
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| Our proposal will tell you of what we have done, what we can do and why work with us - this entails our processes and systems that are key elements in managing your project. What you will not see in our proposal (and we believe are the elements success of your project),is that we are experienced, professional and deliver value; we are a people's company. |
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We are a US company with a wholly owned offshore facility; some of the largest companies are either rooted elsewhere or have a disjointed offshore facility. We are tightly knit with our backend because we went through years of R&D on breakthrough technologies. |
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Our HR policies ensure higher retention ratio. |
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Daily, weekly and monthly report system to clients and regular updates are the essential part of our process. |
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The mix of technologies and R&D opportunities we have attract people to us. |
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Finally, we care therefore we are! |
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