Outsourcing Best Practices: 5 Key Term Paper

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This results in tensions and, therefore, risks" (Goolsby, 2007).

Consideration 4: Is everyone equally committed to best practices?

Best practices and process optimization ensure the provider will save money. But some providers do not implement best practices, or their customer organizations do not allow them to do so, which means that sometimes the provider's business practices must be taken into consideration as well as the cost of a bid. A firm that does not implement best practices can be risk for the buyer, if the provider is running things on band-aid solutions. Conversely, a provider may be frustrated when dealing with a firm that does not instate best practices, or has a different definition of what best practices are.

As an example, Kathleen Goolsby cites "a tiered service delivery in HR BPO would see a sequence of tiers that the users encounter (tier 1 being call center reps using scripts, tier 2 being staff that have the ability to answer more questions, and tier 3 being experts. Best practices would ensure the user stays, whenever possible, in the lower tiers, as they are more cost-effective" (Goolsby, 2007). But the firm using the outsourced call center might prefer that more calls are direct to high-quality users, and that more high-quality staff members are present at the call center during peak hours, to ensure that customers gain a better sense of quality assurance from the company, and thus are more likely to patronize the organization.

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Although using only tier 1, or "scripted" and inexperienced staff members might be cost-effective in the short run, from the perspective of the outsourcing firm, in the long run, being overreliant upon such staff members might actually cost the original company revenue in the form of lost sales.

Consideration 5: Communication

It is essential that both provider and buyer communicate, so they understand one another's long-term and short-term goals, and can agree on the best steps to take to reach those objectives. "The client's clarity of thought around what it is seeking in an HR outsourcing agreement is absolutely critical. Those goals need to be understood at many levels within the organization. Secondly, it's equally important that the provider has clarity around its ability to deliver on that value proposition" (Goolsby, 2004). The best relationship is always one that adds equal value to both companies involved in the agreement. Finally, to achieve this goal of alignment, it may be necessary to redefine objectives if external circumstances change -- yet another reason to make communication a priority.

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