The use of outsourcing at Pfizer. How to open an outsourcing company
Outsourcing principles
Outsourcing(from English outsourcing: out - external, source - source) is one of the ways to optimize all processes in an enterprise by concentrating efforts on the core activity and delegating non-core functions to third-party companies. An outsourcing company is an organization whose activity is the provision of outsourcing services.
The use of outsourcing makes it possible to increase the efficiency of an enterprise, helps organizations eliminate problems with functioning and development in a modern economy, reducing costs, accelerating adaptation to new conditions, improving the quality of products and services, and reducing possible risks. What distinguishes outsourcing from subcontracting is the organization's management strategy, and not the type of partnership interactions, which involves the restructuring of internal production processes and external contacts of the company.
The basic principle sounds like this: “I keep for myself only what I can do better than others, I transfer to an external performer what he does better than others.”
In the conditions of tough modern competition, outsourcing is an ingenious solution for achieving high efficiency and competitiveness of an enterprise, for a strong foothold in the market, especially if the important “price-quality” ratio is observed.
The main goals are:
improving the quality of goods and services at specific production costs;
reducing the price of services offered and products sold while maintaining an optimal level of quality due to the maximum reduction of production costs;
increase financial stability enterprises by minimizing costs, but at the same time maintaining a certain level of quality of products and services.
It's conditional divided into two types: industrial And business process optimization. The first involves delegating some production processes or the entire cycle to third-party companies. It is also possible to sell some divisions, with further interaction within the framework of the outsourcing program. This will allow businesses to focus on new products and services in the face of rapidly changing technologies and increasing demand for competitive advantage. It will also increase the flexibility of production processes.
Business process outsourcing (BPO) involves transferring to third parties certain business processes that are non-core for companies. Typically, the functions of personnel management, accounting, marketing, advertising and logistics are transferred to it.
According to experts, BPO is a dynamically developing type of optimization of production processes at an enterprise, while outsourcing in financial sector and accounting. In the application of outsourcing, companies develop their own types, but they are all classified as follows:
By type of transferred values:
Resource- conducting business mainly using borrowed funds, as well as using human resources and equipment. The question inevitably arises: how then does resource outsourcing differ from rent, credit, or personnel leasing? It is believed that it is legitimate to talk about it in the case when working on loans and leased facilities is not due to the limited capabilities of the company, but to a purposeful business strategy, that is, when even if possible, for example, to purchase your own building or invest own funds resources attracted from outside are still used.
Operating- subcontracting of individual operations related to the development, production, storage, transportation and sale of products. So, for example, a business can entrust the development of a product to a specialized bureau, transfer the order for the production of the developed product to an independent manufacturer, place the finished product in the warehouses of a company specializing in logistics, and give the product to a sales agent for sale. This is an example of maximum operational outsourcing. If the company carries out own production, then it can outsource maintenance and repair work to external contractors. This species is rapidly developing throughout the world.
Functional- transfer of certain functions to external performers. For example, accounting, financial and economic planning or its individual elements, marketing, security, advertising, etc.
Full (maximum)- the enterprise outsources not individual functions of any department, but a certain production or service process in its entirety;
Partial (selective)- the company transfers only part of its specific tasks, for example, programming a WEB site, and the development of the entire strategy and its implementation in practice remain an internal matter;
Improved- usually already in use well-known companies, which transfer certain functions to outsourcers, reserving the role of a distributor;
Intermediate- the organization transfers its secondary functions to a third party for management, believing that its specialists are able to develop the main innovative directions, thus demonstrating high level trust in the abilities of their specialists;
Transformational- the organization invites a service provider who reorganizes the work of the department, developing new systems and a reliable base of knowledge and skills, upon completion of the project he regains full control and assumes his normal duties;
Joint- used to diversify risk in complex projects, that is, used when concluding subcontracts that involve the presence of several service providers;
Joint Venture Outsourcing- creation of a new company to exploit future business opportunities, the client's personnel and assets are transferred to the joint venture, the client and service provider share the profits earned by the new company.
Specialized- transfer of production or other function to another geographical point associated with the unique specialization of a given country (region);
Geographical- transfer of production to the most profitable region of the world for the company. The world's largest corporations (Nike, Ikea) are moving production to the regions South-East Asia, this is due to their cheap labor force, preferential taxation.
State, municipal and private property as objects of management.
The Russian Federation, on the basis of Article 212 of the Civil Code of the Russian Federation, recognizes private, state, municipal and other forms of ownership. At the same time, the rights of all owners are protected by law and court equally.
State property is property owned by the right of ownership of the Russian Federation or its constituent entities. The objects of state property rights are:
Resources of the continental shelf and maritime economic zone of the Russian Federation;
Cultural and historical values of national significance; -
state budget funds;
State banks;
Gold reserve;
Diamond and currency funds, etc.
Objects of exclusive state property also include enterprises that are not subject to privatization - enterprises of the military-industrial complex, nuclear energy etc. But the exclusive nature of state ownership of these objects must be directly indicated in the law.
The state exercises its property rights in three ways:
assigns property to state unitary and state-owned enterprises and institutions on the basis of the right of economic management or operational management;
owns stakes in joint stock companies, i.e. private commercial organizations;
undistributed part of property and budget funds, i.e. treasury, uses through executive and administrative activities, the budget law, government regulations, etc.
Special objects of state property rights (both federal and constituent entities of the Russian Federation) are blocks of shares of joint-stock companies. Joint stock companies with participation of state capital are private commercial organizations - legal entities. All property of joint stock companies is private property, and the state, as a shareholder, participates in the management of the company and receives dividends. But it is not the owner of the property of the joint-stock company, because this property is not the common property of the shareholders, but the property of the joint-stock company as an independent legal entity.
Municipal property is not a type of state property. This is an independent form of ownership. Municipal property is property that belongs to urban and rural settlements. It is not a type of state property. This is an independent form of ownership, in many ways similar to state ownership.
Part municipal property may include:
Local budget funds;
Municipal lands;
Municipal enterprises and organizations;
Municipal housing stock;
Natural resources municipally owned;
Other movable and immovable property.
Just like the state municipalities have their own treasury - rural, city, village, etc.
Municipal entities may also have common (shared) property both with other communities and with the state or private legal entities.
According to current legislation, individual has the right, at his own discretion, to perform any actions in relation to his property that do not contradict the law and other legal acts. However, it must not violate the rights and legally protected interests of other persons. A citizen has the right to alienate his property into the ownership of other persons, to transfer to them, while remaining the owner, the right to own, use and dispose of property, to pledge property and encumber it in other ways, to dispose of it in other ways.
Private appropriation has two types, which differ significantly from each other:
A) Ownership of the means of production of a person who works himself;
B) Ownership of the material conditions of production of the person using someone else’s labor.
The first type of private property is owned by peasants, artisans and other people who live by their labor. In accordance with the economic law of private ownership of labor appropriation, with sole ownership of the means of production, the worker receives all the fruits of his management. This ensures the worker’s complete freedom from any form of oppression and enslavement by other people.
When the owner and the worker are united in one person, there arises a greater material interest in working better for personal benefit. It should not be surprising that individual peasants strive to achieve the sustainability of their farms, sparing no effort and resources. The second type of private property is owned by individuals who own relatively large farms using the labor of many workers. If in the first type of private appropriation the material and personal factors of production are naturally combined, since they belong to one person, then the situation is completely different in the second type of economy. In it, the means of production fall into the hands of a few people, and a significant part of society is alienated from these benefits.
The use of private property is one of the basic elements of mixed economic system. A significant part of the capital is privately owned. Private ownership of capital, goods produced, income received is an important condition support of the free enterprise system.
Private property has varieties:
a) individual or family property - the right of direct control of the property is vested in one person or family. On this form of ownership, for example, farms, small shops, workshops, and cafes can be built. It can also be called unincorporated private property;
b) shared ownership - united private property, where the right to direct control of an object belongs to a group of subjects who agree on the method of managing it. These entities are called co-owners, or shareholders - each of them is entitled to a certain share (share) of the property. Usually the value of this share is set in monetary terms. Many modern enterprises are built on this form of ownership, as it has financial and some other advantages;
c) joint stock ownership is also shared ownership. However, it has important differences, so it can be considered separately from share capital. A shareholder is someone who contributed a certain share to the capital of an enterprise and in return received ownership title: security- share. Shareholder ownership can never, if the enterprise is operating, be physically divided; disposal or acquisition of part of the property can only occur through the alienation of the corresponding shares.
d) the property of public organizations is the property of groups of people united in some public organizations: political parties, trade unions, unions of internationalist warriors, etc. This is not personalized private property, i.e., individual shares in the property that could belong to members of these organizations are not established here. For example, if the authors of this manual are members of the industry trade union of educators, which owns a sanatorium or boarding house on the Black Sea coast, this does not mean that each of us can claim our share in this seductive object. An object of this form of ownership is not divided into individual shares.
“Outsourcing”...What is it and what is the history of its appearance.
Outsourcing (translated from English as “outsourcing” – outside resource using – use of external resources) – transfer by an organization of part of its production functions or certain business processes for servicing by another performing organization specializing in this area.
Outsourcing is often called the greatest discovery, the “phenomenon of the 20th century,” since this phenomenon became widespread in America in the 80s, and then in many European countries. In Russia, this idea began to take root in the second half of the 90s. Many experts believe that the outsourcing mechanism does not bring anything fundamentally new, and its origins go back to such concepts as “division of labor”, “specialization”, “cooperation”, which appeared in economic theory for a long time, and has undergone some changes and modernization.
The opinion of experts is quite justified, with an example of the use of outsourcing back in the 30s. The 20th century is marked by a confrontation between two automobile giants: Ford and General Motors. In 12 years, Henry Ford turned a tiny car manufacturing company into an industrial giant with a turnover of 1,250,000 cars a year. Ford dreamed of a completely self-sufficient industrial empire. Sought to control the movement of its products throughout life cycle: built railways, invested in coal mines, built the world's first multi-level, vertically integrated company.
However, in 1927, Ford was forced to stop the T automobile assembly line. At this time the market passenger cars was captured by GM, headed by Alfred Sloan Jr. The innovation in Sloan's project was the methodology of outsourcing, which he applied 70 years before this term appeared in the literature. He realized that specialized firms perform their functions better than the company’s own divisions, so he based the organization of production on the method of cooperation of highly specialized industries.
Thus, back in the 30s. last century, the struggle between the two leaders of the automobile market clearly showed that not a single company can be self-sufficient and rely only on its own resources. Development becomes possible largely due to effective asset management, so experts are increasingly calling on enterprises to switch to outsourcing as a effective way achieving economic advantages over competitors.
The basic principle of outsourcing is as follows: “I keep for myself only what I can do better than others, I transfer to an external contractor what he does better than others.”
In our opinion, in the conditions of tough modern competition, this principle is an ingenious solution for achieving high efficiency and competitiveness of an enterprise, for a strong foothold in the market, especially if the important “price-quality” ratio is observed.
Main goals of outsourcing:
1. Improving the quality of goods and services at specific production costs.
2. Reducing the price of services offered and products sold while maintaining an optimal level of quality due to the maximum reduction in production costs.
3. Increasing the financial stability of the enterprise by minimizing costs, but at the same time maintaining a certain level of quality of products and services.
Thus, the essence of outsourcing activities is to save time and money, as well as to concentrate the organization on its core activities.
In the application of outsourcing, companies develop their own types, but all of them are classified as follows (Fig. 1):
Fig.1. Types of outsourcing
Outsourcing is already quite common in our country. As a rule, accounting and auditing, legal support, IT services, etc. are outsourced (Fig. 2):
Fig.2. Transferring functions to an outsourcer
HR outsourcing can include any of these functions, both together and separately. Outsourcing of core functions is shown in Fig. 3:
Fig.3. Outsourcing of core functions
The opinion that outsourcing is only for large companies, or vice versa, only for small companies, is a mistake. Outsourcing is convenient and beneficial for everyone, the only difference is in the scope of transferred functions and the purposes of outsourcing.
Small companies, as a rule, transfer personnel records management and calculations (sometimes along with all accounting), often the selection of office personnel and training events (one-time, as a rule). Here, the main idea of outsourcing is the impossibility of maintaining the necessary narrow specialists on staff.
The most important condition for successful HR outsourcing is the competence of the outsourcing company. A professional HR outsourcer applies a business-oriented approach to the client’s tasks; it consists in the fact that the client’s business in terms of personnel management is considered as a complex of interrelated processes and solutions are proposed that contribute to the achievement of strategic goals.
Take, for example, the process of developing compensation and benefits systems. In principle, this is a one-time task. The system must be developed once, and then only maintained and developed, and some adjustments made over time. If we consider this task as a project, and therefore allocate human and financial resources for its implementation, determine a budget, set deadlines, plus the requirement for quality of execution, the need to minimize risks, then implementing such a project “on our own” will turn out to be many times more expensive, rather than handing it over to a professional HR consultant to complete.
Or, for example, personnel selection. There are two components to this process: a regular process – recruitment and a project process – exclusive selection of key personnel. The first process is constant and labor-intensive, usually carried out by HR departments of companies. The second is carried out mainly by headhunters and also costs significant funds. Both of these processes can be outsourced to a specialized company, which, for a subscription fee, having discussed the number of vacancies required to fill, will carry out professional recruitment, as well as select top personnel for the company.
Let's list the advantages of HR outsourcing:
1. Reducing the cost of implementing a business process, namely:
- cost reduction and control;
- saving on taxes on salaries of a staff unit;
- freeing up the company's internal resources for other purposes.
2. Increasing the quality of the products or services received:
- focusing the company on the core activities of both the customer and the contractor - a synergistic effect is possible here;
- use of specialized equipment, knowledge, technologies.
3. Reducing risks associated with the implementation of a business process:
- use of competition in the performer’s market;
- reducing the influence of uncontrollable factors, for example, shortage of components;
- division and partial transfer of risks to another organization;
- additional access to finance - increasing the investment attractiveness of the organization.
Thus, outsourcing of HR services is becoming increasingly popular among HR specialists of both Western and Russian companies, which confirms its effectiveness. By transferring some of the HR functions to outsourcing organizations, the company becomes more flexible in a changing economy and tougher competition. By choosing a reliable provider, the company gets the opportunity to concentrate on its core business and resolve current problems with the help of highly qualified specialists, and also acquires a partner who has a professional approach to solving the personnel tasks assigned to it.
Trends in the development of HR outsourcing in Russia and other countries
According to global statistics, company spending on outsourcing will soon reach one trillion dollars. In Russia, the services of third-party companies for accounting, security or cleaning of premises are still more common. However, experts predict a significant increase in demand for outsourcing in the field of enterprise personnel management in the coming years. The global outsourcing market is shown in Fig. 4:
Fig.4. Global outsourcing market
IN Lately Many international recruiting companies are also modifying their services towards outsourcing the internal recruitment function.
Also popular is the transfer of functions via information security and information technologies (Fig. 5):
Fig.5. Outsourcer's work
Outsourcing is sometimes confused with outstaffing, another common management technology. In both cases, third-party personnel perform certain work, often on the customer's premises. The difference can be seen at simple example. Recently, so-called service companies have begun to appear in large holdings, in particular, IT departments in all structures are separated into an independent specialized company, thereby concentrating highly qualified specialists, synergistically increasing competencies in key areas and ensuring an even workload of personnel in accordance with the need for carrying out work at the holding's enterprises. Moreover, if a company provides services to support the performance of IT infrastructure, implementation software etc., then we are dealing with outsourcing. If, in fact, the same employees (more precisely, their ability to skillfully perform certain operations) are provided “for use” by the service company to the enterprise, then this method is called outstaffing. In the considered example, the first option clearly ensures the stable functioning of the information system for the holding.
How to apply outsourcing technologies in human resource management in practice? One of the common ways to make a decision on outsourcing is to use the outsourcing matrix (BKG Profit Technology) (Fig. 6):
Fig.6. Outsourcing Matrix
It can be applied in the decision-making process about outsourcing knowledge management (understanding learning as a process of transfer and acquisition of knowledge, and information technology as a way of preserving knowledge).
The vertical axis of the matrix examines the degree to which the organization's capabilities align with its strategic goals. The higher the degree of compliance of organizational capabilities with the goals of the organization, the greater the contribution of these abilities to the formation of key competencies, the more unique these competencies are, the more the organization should develop and maintain these abilities. In terms of knowledge management, this means maintaining a continuous process of internal learning and establishing special procedures for codifying and retaining key knowledge in information systems. On the other hand, the less the organization's capabilities correspond to strategic goals, the less their contribution to core competencies, the safer it is for the organization to outsource these capabilities.
The horizontal axis determines the position of organizational capabilities in comparison with the market and competitors. If a company's organizational capabilities are worse than those in the market, it should rely on external sources of knowledge. If a company's organizational capabilities are better than its competitors, then more attention attention should be paid to protecting the knowledge associated with these capabilities, storing them in information systems, and using them effectively within the company. The latter is inextricably linked with learning processes.
The matrix contains several types of quadrants:
Learn - acquiring knowledge and skills from external sources, such as through joint ventures (JVs) and alliances.
Develop - developing your own knowledge and skills, which is inextricably linked with investing.
Protect - protect your unique strategic resources and abilities.
Buy - purchasing goods and services from third party suppliers.
It turns out that identifying competence is much more difficult than determining what it is.
Highlight - education based on non-core competencies of independent strategic business units.
Sell - sale of non-core businesses.
However, when making decisions using the presented matrix, managers do not always correctly interpret the principles underlying it. And this can lead to the destruction of the resources and capabilities on which the organization's competitive advantages are built. What else should you consider when making decisions about outsourcing training and information technologies in companies?
1. Key competencies of the organization
First of all, it is necessary to identify the key competencies of the organization, that is, those combinations of organizational capabilities that:
- provide the organization with potential access to a variety of markets;
- make a significant contribution to creating value for consumers of the organization’s goods and services;
- represent sufficient difficulty for competitors to copy.
2. The next step is to identify places in the organization where these same key competencies could be concentrated.
And here managers are often faced with a rather difficult task: it turns out that identifying competence is much more difficult than determining what it is.
Here it is appropriate to turn to R. Grant’s approach, which consists in identifying the resources and abilities that allow the organization to implement certain strategies. The organization's resources are combined into three main groups:
Tangible (financial and physical);
- intangibles (technology, reputation, culture);
- human (special skills and knowledge, communication and ability to interact, motivation).
By the very nature of tangible resources, they do not often become the basis for the development of core competencies. The situation is different with intangible and human resources. They are the ones who can allow an organization to gain access to diverse markets and make the greatest contribution to the value of products for consumers. They are typically the most difficult for competitors to copy.
Thus, the most essential condition When making a decision to outsource training and information technology, the organization's preservation of its core competencies becomes important. Only if this condition is met can you proceed to work with the outsourcing matrix.
The property of information is such that the organization may not even know about the fact of unauthorized copying and will consider that it is the only bearer of competence based on codified knowledge...
Organizational memory
It was already noted above that training and information technology are not the main activities of most organizations. However, their role cannot be underestimated. First of all, it is people, as carriers of knowledge, who are the main prerequisite for the successful operation of a company. People use their knowledge and skills to perform operations, to sell goods and services, to maintain financial records, and to perform other functions in organizations. At the same time, the knowledge and skills used are further developed when employees are faced with non-standard situations that they have not encountered before. Experience is gained that can be passed on to colleagues and successors.
As a result, the so-called “organizational memory” of the company is formed, which stores knowledge essential for the survival and development of the company. However, this “memory” is heterogeneous and dispersed, so it is not easy to use. Blackler identified five types of organizational memory:
Logical (embrained) - knowledge is closely related to mental (cognitive) processes;
- experimental (embodied) - knowledge and skills are closely related to the experience gained by employees in the course of their daily activities;
- cultural (encultured) - knowledge and skills are closely related to the characteristics of the organization’s culture;
- embedded (embedded) - knowledge and skills are closely related to the processes, procedures, systems and structures that exist in the organization;
- encoded - knowledge is formalized and stored in a codified form, available for use in a given organization.
The presented categories clearly demonstrate the main areas in which organizational knowledge is concentrated. The first two types of memory (logical and experimental) are associated with employees of Varyeganneft OJSC, and extracting (obtaining) knowledge from this area of organizational memory requires training, for example in the form of mentoring.
The next two areas of memory (cultural and embedded) are even more difficult to access. The knowledge stored there can be dispersed throughout the organization in the form job descriptions, technical descriptions and regulations, as well as in the form of myths, rumors, interpersonal skills, which are not so easy to convey to newcomers who are not familiar with the specifics of Varyeganneft OJSC.
The last type of memory (encoded) provides the opportunity to use information technology to store identified and codified knowledge. Thus, when outsourcing knowledge management, it becomes important to resolve the tension between the need to protect access to this knowledge and organizational memory and the need for its continued use in the organization.
The most essential condition for making a decision to outsource training and information technology is the organization’s preservation of its key competencies.
How to reduce the risks of knowledge loss
When deciding to outsource information technology and training, you should clearly formulate the goals that the company wants to achieve as a result. If we are talking about acquiring the most general knowledge, skills and abilities, then, most likely, such outsourcing does not pose serious threats to the integrity of the company’s key competencies. However, some skills necessary for the successful further operation of the company, for example, oil and gas pumping technology or oil production skills, are so specific that their acquisition or development requires conscious identification of their carriers within the company and the organization of special mentoring procedures. Such procedures should become an independent object of attention from managers oil companies, as they can enable a company to maintain the integrity of core competencies over time. When deciding to train personnel in a core competency area (high alignment with the organization's goals in the outsourcing matrix), one should consider how strong the organization is in these skills compared to its competitors.
If the company’s organizational capabilities in the area in question are higher or the same as those of competitors (the “develop” and “defend” quadrants on the outsourcing matrix), then training should be carried out in-house. If the organization feels worse than competitors, then it is necessary to concentrate on external sources of training. Moreover, such sources can be considered not only external educational institutions, but also internships in other organizations that are not direct competitors.
When deciding to outsource services for the development of information systems at an enterprise, you should first of all remember the danger of leaking codified knowledge in the form of databases, descriptions of successful experience, job descriptions, descriptions of processes and procedures. Such descriptions can provide information about the organization's core competencies. At the same time, the property of the information is such that the organization may not even know about the fact of unauthorized copying and will consider that it is the only bearer of competence based on codified knowledge. This, perhaps, lies the main weakness of codified knowledge, which leads us to understand the need for companies to “develop” the ability to use information technology to organize processes for secure storage of codified knowledge.
The opposite side of the security of codified knowledge is the difficulty of accessing it, which reduces the effectiveness of its use. Thus, the ability to correctly codify knowledge, store it safely, and use it effectively has become vitally important for modern companies.
When using the outsourcing matrix to make decisions regarding information technology, it is necessary to determine their role in maintaining and developing the company's core competencies (the area of high alignment with the organization's goals on the matrix). If an organization’s capabilities in the area of key competencies are better than those of competitors, and information technology allows them to maintain and develop these capabilities, then the organization should prefer to perform this function internally (the “develop” and “protect” quadrants of the matrix). If the role of information technology in maintaining and developing key competencies is small, if there is no need to codify knowledge and store it in information systems (medium and low degree of compliance with the goals of the organization on the outsourcing matrix), then, most likely, it is worth entrusting the resolution of issues related to information technologies, external contractors, but ensuring the necessary level of information security.
Thus, today there are many types of business process outsourcing in the world, many of which are successfully used in Russian enterprises. Depending on the specifics, industry, goals and objectives in each specific organization The processes that are outsourced may differ significantly from each other.
In the next article we will look at another effective HR technology - outstaffing.Expand the range of HR technologies used in your organizations!
Project Manager
"Center for Personnel Audit and Development
professional competencies" N.E. Katunina
Recently, more and more companies consider outsourcing not only a way to minimize costs for non-core tasks, but also a strategic step aimed at reorganizing and increasing business efficiency
During the first year of the crisis, the IT services segment, and outsourcing in particular, suffered the least in the IT market. At the end of 2009, IDC predicts, the outsourcing market will even grow by several percent compared to last year (see).
The financial crisis forced companies to take a fresh look at the efficiency of organizing business processes. In previous years, the concerns associated with outsourcing often outweighed the potential benefits. Now companies have had to seriously think about optimizing management models and minimizing costs and once again pay attention to the benefits that outsourcing provides.
At the moment, the greatest demand in the outsourcing market continues to be simple projects, such as support for individual elements of the IT infrastructure, user support. Companies are still reluctant to invest in long-term and expensive projects and prefer contracts with a minimum payback period.
Despite the continued growth during the crisis, the domestic outsourcing market is experiencing the same problems as before. Firstly, this is the immaturity of processes in Russian companies. The fewest problems arise when transferring to an external contractor established, formalized processes for which participants and quality criteria are defined, and the cost of implementing them within the company is estimated. In reality, in many Russian companies the maturity of IT processes is at a rather low level. It often happens that a company does not even have information about the size and composition of the infrastructure transferred to the outsourcer for maintenance.
Another reason hindering the development of outsourcing is the underdevelopment of the existing supply on the market and the immaturity of provider companies. There are now many companies that have outsourcing services in their portfolio, but only a few of them have experience working in real projects, have a developed methodology and are able to successfully adapt the proposed solutions to the needs of a specific customer.
Thirdly, it is difficult for the customer to decide on a large outsourcing project, since the legislative framework for outsourcing, issues of insurance of outsourcing contracts, and state and industrial standards for the provision of services have not yet been developed.
Transferring internal processes to an external contractor certainly looks like a rather risky undertaking in the eyes of business. This is partly due to the real risks of outsourcing, and partly due to established fears that have little basis. Let's look at the main ones.
Vendor dependency
Companies fear that after transferring processes, the outsourcer will have the opportunity to dictate its terms. To minimize this risk, it is necessary to initially build transparent relationships with the supplier, ensure that all process regulations are in place and technological maps individual operations. The most serious mistake of a customer of outsourcing services is if, after concluding a contract, he lets the process take its course. The customer can outsource the execution and organization of the process, while setting tasks will certainly remain in his area of responsibility top level, control and acceptance of results. If a service provider offers an interaction scheme built on the ITSM methodology, then in order to obtain maximum results, the customer should adapt the service provider management processes to this methodology. For this work, you can attract external specialists in ITSM consulting.
Unexpected expenses
The risk of unexpected costs is caused by two main reasons: the customer’s inability to realistically estimate the costs of implementing a process, for example, infrastructure maintenance, and an insufficiently developed service contract, which allows the supplier to arbitrarily interpret the cost of services provided.
Companies often do not have complete information about the composition of the infrastructure, the maintenance of which is outsourced. More more problems causes an assessment of the real cost of service. As a rule, the relevant costs are distributed across different cost centers, it is not easy to fully account for all indirect costs, and companies are limited to only counting the direct and most obvious ones.
As a result of an incorrect assessment of the cost of work, the company sets inadequately low starting prices at an auction or tender and may find itself in a difficult situation by signing a contract with a dumping supplier who is unable to provide the required level of services.
It is possible that after concluding a contract, the outsourcer, taking advantage of the fact that it is very difficult to change a supplier, will begin to interpret to his advantage the clauses of the contract that describe the composition and scope of services, the method of pricing, and issue invoices for additional work, and as a result, the actual cost of the contract will be higher than planned. To prevent such a situation, you need to work out the SLA in detail, agree on the composition, volume and levels of services. A transparent and comprehensive pricing scheme is also needed.
Failure of the supplier to fulfill its obligations
Another risk is the threat of the supplier's failure to fulfill its contractual obligations. The most common reason for this could be the bankruptcy of the outsourcer. This danger should not be forgotten, given the lack of maturity of the market, and therefore of most service providers, as well as the ongoing financial crisis. In other cases, the supplier may simply be unable to fulfill its obligations and may not have the necessary resources, personnel or experience to do so.
The main recommendations in this case are to pay the most serious attention to the choice of an outsourcer and provide for a procedure for exiting the relationship. Such a procedure could be a plan to return to using internal staff or a plan to change an outsourcer. To do this, when concluding a contract, it is necessary to make all interaction processes and procedures for providing services as alienable as possible: to create, together with the outsourcer, the appropriate regulations and standards, to collect up-to-date information about the existing infrastructure and complete statistics of the services provided, etc.
Information security risks
Until recently, the risk of a decrease in the level of information security was considered the main argument against outsourcing. Today, such concerns are fading into the background. The main threats to information security come from the company’s own employees, and organizing their control is much more difficult and more important than controlling external organization, which is bound by a contract and values its own reputation in the market.
This risk, of course, must be taken into account, but it can be significantly reduced if you follow simple recommendations. The service contract must include confidentiality agreements and methods for monitoring compliance with agreements. When choosing a supplier, you need to pay attention to its existing information security culture, the presence of an information security management process, and an information security policy. When concluding a contract, the outsourcer agrees on information security policies with the client. To simplify the compatibility of companies, it is reasonable to organize information security management processes in accordance with generally accepted standards, for example, ISO 17799.
Loss of key personnel
Another significant risk is the possibility, as a result of an outsourcing project, of losing those company personnel who are the bearers of key competencies and critically necessary knowledge. It is important that the company does not immediately lose that part of its employees whose knowledge, skills and experience are significant and inalienable. Otherwise, a serious failure in the quality of the services provided may occur at a time when its staff has already left and the outsourcer has not yet established sustainable service at the proper level.
Transferring the customer’s employees to an outsourcing company can help avoid such problems. Therefore, the ability of an outsourcing company to include all or part of the customer’s personnel in its staff can be considered a plus when choosing a supplier.
Thoughtful outsourcing strategy
First of all, it is necessary, based on general corporate strategy, agree on an outsourcing strategy. There are three key points in this process:
1. Defining the goals and objectives of outsourcing
Outsourcing is one of the tools for implementing corporate strategy and can be used to solve many problems, such as: concentration on basic competencies; Access to modern technologies; the ability to quickly scale resources; simplification of entering an IPO; staff reduction, etc.
The most important motive for outsourcing processes is still cost optimization. But there are certain difficulties associated with this. It is quite difficult to estimate the real cost of implementing a process within a company and compare it with the cost of outsourcing. The task is further complicated by the fact that services of different levels have to be compared. Therefore, it is incorrect to say that outsourcing will necessarily lead to a reduction in IT costs. It is much more correct to consider the purpose of outsourcing to be the optimization of the price/quality ratio and the ability to flexibly manage this ratio.
2. Choosing an outsourcing model
There is enough a large number of relationship models that can be attributed to outsourcing. Gartner identifies eight models for meeting enterprise IT service needs: internal services; multisourcing, or selective outsourcing; insourcing; joint venture; full outsourcing; consortium of suppliers; service company; general contractor.
Except for the first option, all other models are examples of outsourcing.
It is necessary to choose one or another model for organizing outsourcing relationships taking into account the characteristics of the company. For example, for large, geographically distributed organizations, there are obvious advantages to the model of cooperation with a single large contractor that provides a wide range of services and a single point of contact. With multiple service providers, significant costs and effort are expended in managing relationships, coordinating activities, and resolving problems that arise across the lines of responsibility of different companies.
3. Determination of performance criteria and full cost assessment
Based on the assigned tasks, criteria for the effectiveness of the outsourcing project are formed. These criteria must be formulated in business language and correspond to the main goals that the company pursues when transferring a particular process to an external contractor.
Project objectives and performance criteria must be clearly communicated to potential service providers.
Based on the goals and tasks to be solved with the help of outsourcing, it is necessary to assess the possible cost of the project as fully as possible. At this stage, it may make sense to involve external experts with experience and knowledge of the relevant methodology.
Choosing the right supplier
Since the success of any outsourcing project requires close interaction between the customer and the service provider, it is advisable to choose a supplier with a similar corporate culture and desire for cooperation.
When choosing a supplier, first of all you need to pay attention to the following qualities: experience in similar projects; the reputation of the outsourcer in the market; stability of the company; availability of well-developed methodology and regulations; Availability of necessary personnel, resources and technologies.
Detailed SLA approval
The main document that establishes the relationship between the provider and the consumer of services is the service level agreement (SLA). The SLA must clearly describe all the parameters of the contract, in particular: the composition and parameters of services; boundaries of responsibility; clear quantitative quality criteria; supplier's responsibility for the result, including financial compensation for improper fulfillment of obligations; procedures for leaving a relationship.
Organization of outsourcing relationship management processes
Successful outsourcing of processes is possible only if there is reliable control and project management on the part of the customer at all stages of cooperation. Perhaps the most important tool, without which it is difficult to implement almost any outsourcing project, is a contract management system at all levels - strategic, tactical and operational. At the strategic level, the decision on the goals and objectives of the project is made by management, it supports contract management, and controls the main results of the effectiveness of the entire project. At the tactical level it happens operational management services, monitoring performance criteria for individual services and processes, solving current problems. At this level, interaction takes place between line managers of companies and project managers on both sides. Operational level represents users of services and direct performers of work.
Interaction between parties at all levels must be continuous, aimed at constantly improving services and better meeting customer requirements. For this purpose, for example, at the tactical level, regular meetings of the parties are organized to analyze the results and revise the SLA.
It is very important to maintain mutual openness between the parties and maintain partnerships when resolving all emerging issues. In these conditions, outsourcing can bring maximum benefit both sides, to ensure mutual survival and development in difficult conditions troubled economic ocean.
Alexander Lyubinsky - Deputy General Director for Business Development of the Rosservis company;[email protected]
Nikolay Afanasyev - product and service development manager at Rosservis;
Are you planning to start your own business, take the first steps towards opening your own business? You might want to think about starting an outsourcing company. Today, in the Russian services market, outsourcing can with full confidence be attributed to one of the best options promising start.
As a rule, the technical side of the issue does not cause problems. However, in organizational terms, novice entrepreneurs often feel not entirely confident. Let's try to understand what is included in the concept of "outsourcing", what an outsourcing company is, what its activities are, how to draw up a business plan and organize work, what advantages it can offer its clients.
What is outsourcing? Just something complicated
The growth of business specialization is a characteristic feature of the modern economy. Accounting moves to international standards financial statements(IFRS), information technologies are developing and becoming more complex, and requirements for information security and personnel management are increasing. Under these conditions, the combination of all areas within one enterprise (especially if we are talking about the small and medium-sized business segment) leads to a decrease in efficiency and profitability.
What optimization tool does progressive business use? Outsourcing provides a comprehensive answer to this question. All non-core activities are transferred to a third party organization specializing in providing services in this area.
Main segments of the outsourcing market
If you are interested in how to open an outsourcing company, approach the task responsibly. First of all, decide on the profile of your future activities. Among the most common, and therefore the most popular, areas are the following services:
– accounting (accounting and tax accounting);
- legal support;
– logistics;
– marketing;
– IT service (repair and maintenance of computer equipment, ensuring information security, development and promotion of a company website or high-precision systems, programming, updating and configuring software);
– personnel management (personnel management);
– cleaning.
What is the economic feasibility of interacting with an outsourcer?
By concluding a bilateral agreement, your client has the opportunity to significantly reduce the costs required to conduct a specific type of activity. There is no longer a need to equip workplaces and organize advanced training for workers. At the same time, paying for the services of an outsourcing company will cost much less than maintaining full-time staff. Savings reach 50% or more.
Benefits of outsourcing
Why else are the services of an outsourcing company beneficial for clients, what do they gain from cooperation with third-party specialists? Let's name two key arguments in favor of outsourcing that you can present to a potential customer.
No risks and confidentiality. Outsourcing always implies the presence of warranty obligations and non-disclosure of information received from the client to third parties.
High level of service, professionalism, maximum efficiency. Entrepreneurs who are knowledgeable about own experience, what an outsourcing company is, we have repeatedly been convinced of how important their professional and business reputation is for representatives of this business.
Regardless of the size and type of ownership of the customer enterprise, he is promptly provided with equally high-quality services. The performers are exclusively competent specialists who know how to find a way out of the most confusing and difficult situations.
Organization of work of an outsourcing company
We have understood the concept of “outsourcing” and the areas of activity in this area of business. Now let’s begin to consider the question of how to open an outsourcing company, focusing on the nuances that are important for the start-up stage.
The first thing you will need to do is register a company in accordance with current legislation. Next you rent suitable premises(preferably in the business part of the city or business center). It is important that your office looks respectable. Therefore, if necessary, update the furniture and spend a little time redecorating, having previously coordinated your actions with the landlord.
The next step is hiring staff. Take this very seriously and select only experienced and qualified workers. Pay attention to how their specialization corresponds to the direction of your company. In parallel with the selection of employees, create a website for your company and start an advertising campaign.
Why is a business plan needed?
A number of aspiring entrepreneurs believe that by drawing up a business plan for an outsourcing company, they are wasting their time. Why is this opinion wrong?
– You have decided why and what kind of business you are starting, what you want to offer to the consumer. However, on initial stage it's just an idea. Working on a plan for the formation and further actions future company will help you systematize your thoughts, put your plans into concrete form, without missing a single thing important moment. You will be able to pre-calculate the efficiency of your business based on expected expenses and income, and anticipate possible risks.
– A correctly drawn up, well-thought-out business plan serves as an effective tool for attracting investors. Your project can become the object of serious investment if you clearly demonstrate a high probability of significant profit.
– What should this document contain? Let's take IT outsourcing as an example. The business plan of a company specializing in the provision of services in the field of information technology provides for accounting for the costs of its registration, rental of premises, purchase of computer equipment and licensed software, marketing and advertising activities, and planned income indicators for a specific period of time.