A company planning to outsource one or more of business processes (BPO) should prepare extensively for success. Thorough preparation is, in fact, the only action that will ensure a successful BPO strategy.
Specifically, company executives managing the BPO transition should study ORM before proceeding with the outsourcing strategy. ORM stands for “outsourcing relationship management”, a term that includes organizational structure, management strategy, and IT infrastructure. It’s an entire business discipline, and execs should be familiar with it before embarking on any BPO project. An LMS online training course on how to manage an outsourcing relationship will ensure that the BPO strategy is effective.
BPO means, of course, that work once done in-house is moved to specialized offshore or domestic service providers. Oftentimes, a few employees are transitioned to the service provider team while others remain in-house to manage the outsourced group. Or, a company makes no changes in their in-house team, but contracts an outside service provider. Either way, it’s in the outsourcing governance area that companies and institutions tend to struggle.
An online ORM course teaches company execs what is often unforeseen; that there are certain skills and knowledge required to effectively manage outsourcing relationships. This realization usually comes too late, as companies struggle to effectively manage their outsourcing strategy as it is being implemented, rather than beforehand.
This lack of forethought and a formal design of outsource governance often lead to poor ORM and as a result, ineffective outsourcing strategies. Online crash courses in ORM work to prevent such failure.
A company’s executives should approach outsourcing relationships in a way that corresponds exactly to the company’s short- and long-term objectives. And one concept that an Learning Management System course teaches executives is that good ORM involves a proactive strategy in preventing failure. Instead of simply measuring, tracking, reporting measures against targets, and penalizing the service provider, executives should use that information to manage future performance. That way, when systems or processes are showing signs that they are heading towards failure, they can be eliminated or changed before the problem actually occurs. A proactive approach has higher rates of effectiveness than any carrot-and-stick strategy. It will also help to root the major causes of dysfunctional or unsatisfactory outsourcing relationships.
A complete online course in ORM deals with the three areas of concern in BPO transition and ORM, which are management strategy, organizational structure, and IT infrastructure. Management strategy refers to identifying the best service level agreement and relationship techniques for your business process outsourcing strategy. Organizational structure refers to developing the appropriate in-house management, or the oversight structure and mechanisms. Finally, IT infrastructure is the supportive IT infrastructure which enables the monitoring and management of a network of external service providers.
Management strategy involves a critical element: contract management. This includes tracking, measuring and ensuring results, tracking, penalizing and preventing failure, and developing performance measurements. These measurements should not only address current performance, but also respond by providing proactive solutions and predictions. Contract management also involves a quality assurance approach that governs the processes and the service delivery of a BPO group. Remember that the outsourced service provider has a vested interest in achieving results, just like the company is it servicing.
Since service provider contracts are often transitory, they should specify responsibilities and processes of the BPO transition term. Generally, the contract with an outsourced service provider should include provisions for performance management, and the contract language should be flexible, allowing for changes as they become necessary.
An LMS course for executives implementing and maintaining an outsourcing relationship should cover not only the benefits of BPO, but also the risks involved, so that problems can be prevented before they arise. For example, there are a number of possible risks when the service provided involves the use of the internet. The internet’s extensive geographic reach, ease of access, and anonymity call for close attention to maintaining secure electronic systems, intrusion detection, as well as user authentication, verification, and authorization. Understanding how to manage an outsourced relationship with these risks in mind will ensure that any potential dangers are avoided.
Ultimately, it is the executive’s responsibility to manage the outsourcing relationship, a task that shouldn’t be taken lightly, and is best prefaced by an LMS course in ORM. After all, regardless of service provider shortcomings, changes in business conditions and technology, and other factors that may account for problems in a BPO strategy, the responsibility of achieving results lies with the party who has the most to gain or lose in the outsourcing relationship: the company itself.
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