| Introduction |
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There are two contrasting views of the Outsourcing Market, one emphasizing the Core Competencies perspective, and the other adopting a cost discipline view. But both views agree that in order to be competitive companies need to outsource. |
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Andrew Kakabadse
Cranfield School of Management |
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Historically outsourcing has principally targeted cost reduction, by doing the same thing more cheaply and effectively. This is changing. Increasingly Organizations need to be adaptive - Fast, Flexible, Agile and Connected, but as a result of technology being available over the past several years, many organizations are working in complex fragmented environments. For these organizations, transformation is both essential to remain competitive, and involves a significant change. Thus a partnership with an outsourcer who has the expertise to connect up these technologies and get them all working in a technologically harmonious work space is critical. |
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Jiva can combine skills in technology, transformation, and business process operation, and can provide and co-ordinate access to delivery of important advances such as global delivery models and on-demand computing. Flexibility and cost saving are still achieved at all levels. |
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| Building an Outsourcing Strategy |
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As options grow a robust outsourcing strategy becomes a must. Any company considering outsourcing must decide what it must outsource and how. Most companies tend of hold on to anything that is "Core" to their business, i.e. anything that they need to excel at and retain control in-house. Anything that would be considered a "Core" i.e. anything that needs to be done, but is not really a competitive differentiator, can be outsourced easily. Companies will usually also outsource "Core" areas once they decide to have an Offshore Development Center (ODC) |
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| Choosing what to Outsource |
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Maintenance, bug fixes, product upgrades, and network and infrastructure management
In this case, any requirement that involves maintenance of products, or day-to-day operations is a target for outsourcing. This frees up expensive manpower for more critical needs of the client. The focus is on achieving such tasks with lower cost manpower, while ensuring that these tasks are performed effectively, in the least amount of time possible. Jiva has several such products that it maintains for its customers on a year-on-year basis.
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2. Customer Support Service and BPO
Support operations like marketing, finance and accounting are essential to a business but are not strategic differentiators. They are continuously changing. The ideal solution is to share this cost and disruption of change with an Outsourcing partner. Also Product Customer Support on a 24x7 basis is an important operation for most companies, but can be outsourced effectively offshore. Jiva's team can be quickly put in place to handle such requirements.
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3. Industrial Automation implementation and maintenance
This is a critical area of outsourcing, where the implementation, running and on-site maintenance of automation that runs most manufacturing systems maybe outsourced. Most manufacturing organizations base their entire efficiencies on the level of automation available, and this is an area where 24x7 monitoring and maintenance are of paramount importance. Jiva works with major manufacturing industries to make the task of the Electrical, Instrumentation and maintenance teams easier, so they can focus on the core areas such as improvement of production efficiencies and expansion.
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| Jiva's Delivery Model |
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| Some tips for outsourcing |
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1. Have a clear Outsourcing strategy
It is important to clearly define what is expected of outsourcing, and what success would look like. Service level agreements with Jiva could be used to define this expectation. From experience Jiva has seen many cases where these agreements get revised and simplified once the outsourcing is underway for sometime,
as the client gets more comfortable with deliveries from Jiva. |
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2. Building the right relationship
The relationship needs to be built on flexibility, to meet external changing conditions, financial crunches, and even because it is not possible to plan for every eventuality. Jointly agreed and aligned goals which set the environment for this flexibility are crucial for success.
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3. Shared Responsibility
It is important to go into the outsourcing with the understanding that all parties involved in the outsource are jointly responsible for the results, both short term and long term. |
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4. Get the contract right
The contract needs to build the foundations for a strong relationship. It needs to balance certainty with flexibility and also balance tight contractual commitments with trust.
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