The document provides 10 commandments for successful outsourcing. The commandments include getting your own business processes in order before outsourcing; determining which processes to outsource based on efficiency gains; choosing vendors carefully based on expertise; considering total costs; demanding performance metrics and visibility; understanding cultural differences; and adopting a systematic approach. Following these 10 commandments can help improve chances of outsourcing success.

1. The Ten Commandments for Outsourcing
Whether you are evaluating suppliers or creating a The rule of thumb is that a process should be
global sourcing strategy for your organization, here iterated internally until the investment in
are 10 Commandments guaranteed to improve your improvement outweighs the return. For example, if
chances of success when outsourcing. you must invest $400,000 in the next iteration, but
the aggregate savings are expected to be $200,000,
no further improvements should be conducted
1. Thou shalt get thine own internally.
business in order
3. Thou shalt not succumb to
Outsourcing is a natural progression of a company's
cost reduction plan and/or efficiency improvement the lure of the captive
effort. Most failures occur when a company rushes
into a project without first thoroughly streamlining
center
and documenting its own internal processes.
The benefits of owning and operating your own
Once you have made the decision to outsource, your captive center can sound enticing: tighter controls of
first step will be to – ensure that your internal engineering processes and developing an on-the-
processes are not only in place, but also aligned ground knowledge of the offshore market you are
with your corporate business strategy. If you miss considering.
this step your outsourced process will likely be
impeded by tactical failures. Forrester’s recent report, “Captive Offshoring
Centers Are Imploding” states that the cost per
person per month of a captive offshoring center is
2. Thou shalt determine which about $4,944 as compared to a third party service
provider at about $4,321. The report indicates that
process to outsource rising labor costs, turnover problems, and lack of
integration are some of the reasons for the
The best understood and most well-defined process implosion.
can only be driven to a certain level of efficiency
before the results flatten out – or even diminish.
That's where the promise of outsourcing comes in.
© Copyright 2010 InterGlobe Technologies

2. The Ten Commandments for Outsourcing
4. Choose thy vendors 7. Thou shalt request
carefully continuous process
To reduce the risk, time, and expense associated
improvement
with outsourcing, it's important to choose the
The world's most sophisticated outsourcing vendors
outsource vendor that has the expertise with the
have the ability to continually monitor their
particular process you want to outsource, as well as
customers' processes using a Business Process
deep knowledge of your industry. All you need to do
Management (BPM) platform. Vendors utilizing a BPM
is share your business process and the outsourcing
platform can easily share improvement opportunities
vendor can get your process up and running faster
with their customers and rapidly make the changes
and much more efficiently. Other benefits include a
necessary to take advantage of the potential
lower transition cost as training for certain parts of
enhancements.
the process already exists inside the vendor’s
Continuous improvement in outsourcing goes way
operational capability. Choosing the right outsourcing
beyond the basic 'lift and shift' outsourcing model. It
partner can be the difference between your project
increases the efficiencies of the outsourced business
meeting its goals or you creating a new management
processes and delivers improved operational and
headache.
business results. As an outsourcing model, it has the
power to drive improvements in your business, year-
on-year.
5. Thou shalt not neglect the
total cost of offshoring
8. Thou shalt not overlook the
Hourly labor rates are only one variable in the total impact of relationship
cost of ownership of an outsourcing relationship.
Buyers often neglect factors like onsite versus management
offshore leverage ratios, productivity, governance
cost, and the time spent managing offshore When choosing an outsourcing partner, outsourcing
relationships. Don’t overlook these cost factors while buyers must consider the relationship management.
negotiating with your selected outsourcing vendor. It is important to align your business with service
providers that are the "right size" for you so you get
6. Thou shalt demand the "A" players on your project teams and have
adequate access to and interact with the
performance metrics, outsourcer’s senior management. Strong relationship-
mapping at all levels of your organization will ensure
visibility and control that you and your service providers are working
closely together, which will reduce the cost of your
To ensure that your outsourced process achieves the governance model.
business advantage sought, it's essential to work with
your outsource vendor to define a set of metrics, or
Key Performance Indicators (KPIs), for the process.
Your organization should clearly define all metrics, 9. Thou shalt understand
generate current reports of the actual service levels cultural differences
achieved, and provide this data to your outsourcing
partner for review prior to signing the agreement.
The objective is to determine whether or not your Understanding the culture on both ends of the
vendor can meet your requirements without eroding outsourcing effort can improve communication and
your cost savings. Among the most important KPIs, in reduce the delays and redundant efforts that
general, are, time, cost, escalation, quality, and sometimes occur because of communication gaps. It
reporting. Avoid the pitfall of unreasonable is important to understand the cultural differences
expectations as this is certain to drive up costs and between both parties to the relationship. Recognizing
lead to discontent with the performance of your and addressing these differences in the beginning will
outsource partner. lead to a mutually beneficial relationship.
© Copyright 2010 InterGlobe Technologies

3. The Ten Commandments for Outsourcing
Equally important is the understanding and planning Finally…
around holiday times for both the vendor and the
client so that proper planning and implementation
schedules can be formulated. Outsourcing is here to stay. In a highly competitive
business environment, companies need to stick to
their core competencies and go for strategic
10. Thou shalt adopt a outsourcing to reduce their costs and become more
systematic approach effective in their services to their customers.
Outsourcing will be looked at as an essential business
Companies have to carefully analyze, select, and skill. The path to successful outsourcing is paved with
deploy an outsourcing strategy in order to optimize the above mentioned Ten Commandments for
results. For example, they should not take a Outsourcing. Managing outsourcing with care and
superficial approach to defining what is core and forethought can build a thriving partnership.
non-core to their business because they may lose
future capabilities, raise operational risk, or lose
control over crucial business processes. The
effectiveness of an outsourcing strategy hinges on
how well they can comprehend operational
performance and how meticulously they can follow a
proven process for evaluating, optimizing,
implementing and monitoring the service.
Before the services begin, you need to designate a
project manager to work with the outsourcer's
project manager. Your project manager would act as
a liaison between your project team and the
outsourcer's project team. The project manager
provides data and makes decisions in a timely
manner, ensures that the appropriate personnel are
available to the outsourcer when needed,
participates in project status meetings, helps resolve
problems and escalates issues as necessary, and
directs the project implementation schedule along
with the outsourcer's project manager.
This would also help you in freeing up internal
resources for the outsource project and/utilize the
internal resources in other activities.
© Copyright 2010 InterGlobe Technologies

4. The Ten Commandments for Outsourcing
Global Services 100 annual ranking of IT and BPO service companies
(InterGlobe Technologies)
GS100 – 2010, 2009
Rising Stars Category Global Outsourcing 100 service providers list
(InterGlobe Technologies)
IAOP – 2010, 2009
Top 50 Best Places to Work in India 3 years in a row
(InterGlobe Enterprises)
Great Place to Work Institute, USA – 2010, 2009, 2008
Black Book Ranked 2nd Travel BPO Outsourcing and Ranked 3rd Travel IT Outsourcing
of (InterGlobe Technologies)
Outsourcing Global Black Book of Outsourcing - 2009
Fast 50 India and Fast 500 Asia Pacific
(InterGlobe Technologies)
Deloitte Technology – 2009, 2008, 2007, 2006
Top 15 Exciting Emerging Companies to Work for
(InterGlobe Technologies)
NASSCOM – 2008
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InterGlobe Technologies (IGT) is a leading BPO & IT Services provider
committed to delivering innovation and business excellence across the
entire spectrum of the travel, transportation and hospitality domain.
Ranked amongst the World’s Top 3 Travel Technology Solutions providers,
the company offers integrated Application Development and Maintenance,
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Corporate Headquarters:
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