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Posts Tagged ‘outsourcing’

I really don’t know why people are STILL complaining about their jobs being outsourced.  Yes, the obvious drawbacks are possibilities of wage deflation, losses of luxurious corporate benefits, absence of job security, and absolute increase in work pressure and workplace efficiencies.  Plus, most of us complain about the degradation of service levels as well as increased costs in inter-partner bureaucracies and training.

I wrote last year about the irreversible trends of corporate outsourcing, and they are only getting more popular.  My arguments are that even if you are fortunate enough to still be employed by the big corporates, none of the so-called solid benefits are going to last forever.  You don’t have job security, your bonuses are increasingly tied to the ever-rising or unattainable goals.  The company is talking about a “review” of your pension plan, and human resources just broke the news that rising health care premiums are driving their need to reduce medical coverage gradually over the next few years.

Unless you are at the so-called top of the food chain, and making huge revenue for the company directly, chances are, no one is immune.  The world is a flat economy, and cheaper labor around us are certainly going to “steal” our jobs, whether we like it or not.  Instead of complaining, we really need to step up our game by finding out what makes us either irreplaceable, or what’s unique in our problem solving approaches.

If you are real worried about your life at an outsourced company, hear it from me, your days are already numbered at your current one.

Life is hard, and people pay you because you have the ability to handle head-scratching problems, and very often ahead of its time.  Money is not going to fall from the skies and working models are evolving every second.  So get over it, stop reminiscing, and grow a pair.

 

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I love a good meaningful conversation.  If you give me a choice of ten casual acquaintances versus one single dinner companion with an open heart and soul, I would pick the latter, any time of the day.

You may find it as an obvious fact, but in a heavily condensed urban city where physical proximity does not equal to emotional availability, we should count our blessings whenever we have the opportunity to enjoy a nice, candid, no-agenda exchange.

Those of you who have read my earliest posts would remember how difficult it is to explain my profession.  It’s not in one’s normal vocabulary, and it’s not something that you can describe in one sentence before you completely bore your partner to death.  Yet if someone is curious enough to probe, I am more than happy to act as an ambassador for my professional community, or more selfishly, for my own reputation.

I’m always happy to reciprocate, of course.  Last night I was introduced to a field called Occupational Therapy.  I have heard of Physiotherapy, or Vocational Training, but shamefully not the former.   As my friend explained, the Chinese translation of the field is more than misleading, and I conveniently blamed it on the same.  After hearing his line of work, and learning about the lack of professional resources particularly in the mental practice area in this city, I find his profession fascinating both in terms of technical knowhow, and of its limitless possibility.

I can’t help but compare what we do as a living, as I always strive to keep myself grounded by not taking myself too seriously.  The following conversation never happened last night, but in my imagination, part of which could go something like this:

What are you most proud of with the work that you do?

My friend:  The ability to see my patients recover and adapt to the desired state according to prescribed progress.

Me:  My stakeholders giving me 30 minutes to convince them that I’m not wasting their time to help them save half a million dollars.  Oh, also, to finally get my stakeholders know what it is that they truly want to buy.

Who do you constantly work with in your everyday work life?

My friend:  Patients who have a certain disability to achieve the daily “occupations” of life, and their loved ones who see the need to seek professional help for subject’s adaptation and recovery.

Me:  People who hate me, underestimate me, abuse me, and set me up as scapegoats for one or more of their supply chain problems.

What is the demand like for your profession?

My friend:  There is a growing lack of professionals in our field.  The demand is constantly surging and we find it difficult to keep up with the relatively long accreditation process.

Me:  Demand? What?

What is the one biggest challenge that you see in your profession?

My friend:  The lack of awareness of what Occupational Therapy is.  We hope the Health Department could educate the public more so that patients can seek treatment earlier on, and more resources can be injected for those who are very much in need.

Me:  To make the case for department heads that the half million dollar savings we achieved for their business equate to jobs saved for their employees.

What are you most frustrated about your work life?

My friend:  Below-par recovery progress due to resources insufficiency or uncontrollable physical complications.

Me:  Incredibly idiotic, egoistic and insecure morons.  And they’re not even mentally handicapped.

What is the one question that you get the most from people about your profession?

My friend:  What’s the difference between Occupational Therapy and Physical Therapy, or Vocational Training?

Me:  Why are we stuck with this crappy ball point pen at the office?

 What is the outlook of your profession?

My friend:  Instead of containing within the public healthcare sector at present, we see the growing need of increased specialized care that warrants investments from the private sector.  Wages and recognition will be on the rise.

Me:  Ultimately, we will be helping our companies achieve more cost savings by outsourcing our own jobs. 

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What is outsourcing?  Many are familiar with the term, but few can cite specific examples in their space.  In fact, it is much closer at home than you think.  There is outsourcing in your office, your own business, and more often than not, your home.

Technically speaking, whenever you are paying for an external party to help you with a task, service or process that you would normally do by yourself, you are outsourcing.  Hiring someone on your payroll is not, since you are still owning the responsibility.  So when corporations are trying to concentrate more on their core business of making money, every one of them are outsourcing their support functions, or, non-core businesses, to external parties.

Some may claim that it’s the capitalist way of cutting jobs and pay.  Though I don’t support allowances of inefficiencies.  If we really have no clue how to design, build, manage and maintain the car park in our office building, what’s the point of painstakingly identifying and hiring experienced personnel, only to fire them after the facility is completed?  Instead of spending unnecessary amount of time researching for the right technology and systems, applying for the right permits, and running into hick-ups and delays of unknown waters, outsourcing the car park design, construction and management services to a professional firm in the industry proves to deliver much more precise results.  We are now outsourcing our non-core requirements or services, to a partner whose services are of their core business proposition.

The only so-called alarming trend nowadays is that more and more of our supposedly core corporate functions are being identified as non-core.  Corporations want to save costs, and they also want to protect their brand image.  Though it doesn’t really work these days as public opinion still goes after the cost bearing parties, corporations still find it better hiding behind the outsourced partner.  Certain obligations can be passed along, financially or legally.  For the last two decades or so, we are seeing payroll, real estate management, mailroom services, logistics, finance & accounting, IT, HR, legal, and of course, procurement, being outsourced.

The way I see this makes sense is that with external parties, we are harsh toward them.  We want accountability, crystal-clear processes and deliverables, and lower costs every year.  If they would have done it in-house, it may take considerably more time and efforts to pitch, convince, and motivate internal staff to “up their game”.  Plus, there is on average 30% additional HR benefits being invested on each employee on top of their salaries.  As long as a reliable partner can be identified, most senior corporate management think it’s just a no-brainer.

For employees, this is definitely a worrying trend.  None of our jobs are truly secure these days.  Thousands of professional firms are popping up every month around the world looking for services to take up for our employers.  Just knowing what our employers do as a business actually limits our career.  We now need to make sure we are truly functional specialists that are non-industry specific.  What about opportunities?  Yes, consider the option of moving into specialist firms or BPO (business processing outsourcing) firms.  Just google the area you are in and you will find tons of HR services firms, finance & accounting solutions, procurement services BPO centers, and so on.  The field really has changed, and so are the game rules.  Though the experience can be a lot more satisfying depending on the type of person you are.

Still wanting a comfy life with the security of a large corporation?  Make sure you are one of the best within your team, and target for the remaining few positions that are still needed to lead and manage your corresponding outsourced firms.  These positions are still critically needed within the headcount of corporations, because all of them will acknowledge that failing to sufficiently manage an external outsourced partner is always a ticket to disaster.

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I applaud what the territory’s Ombudsman Alan Lai Lin said during a press conference over the Water Supplies Department’s mixed-up meter readings screw-ups over the last 20 years.  Apparently over 100 cases of water-meter mix-ups are reported each year.  A complainant received water bills up to HK$900 even though her flat was vacant for 6 months.   The Ombudsman pointed out that although the installation of water meters has been contracted out in recent years, greater supervision is needed by the Department.  “Even though the work is contracted out, the responsibility should not be contracted out.”, said Mr. Lai.

This couldn’t be more spot on.  Whenever I lead contract negotiations on outsourcing deals, mediate issues and performance complaints with incumbent outsourced providers, or conduct qualification analysis over whether or not to outsource with senior business partners, I always see people with the wrong understanding over the objectives of outsourcing, or contracting out in the above scenario.  Aside from obvious savings on costs and headcount, many corporations look at moving part of their processes offshore so as to focus on core elements of their businesses.  This has been gaining traction over the last 10 to 15 years.  In fact, no one would be surprised to see that a lot of the customer facing functions are being contracted out.  Call handling, customer services, direct selling, payroll, HR, and installation like what we see above for water-meters.  Oh yes, procurement can be outsourced as well.

Many clients think that the worst is over once the decision is made and endorsed by management.  They believe that they can then sit comfortably and bark orders at the outsourced providers and transferring all business targets onwards.  These are clearly the most irresponsible clients.  Experienced leaders understand how much more difficult it is to manage outsourced providers, much more so than running their own team of staff in-house.   Businesses need to undergo what we call risk analysis.  They need to brainstorm and  list out everything that could go wrong, and then place relative likelihood and precautionary as well as handling guidelines for each scenario.    They need to assign specific resource (in-house) who is tasked with managing the outsourced provider on a daily basis.  Sometimes this resource needs to work on-site with the provider.  Accountability has to be set right from the start with clear distinctions.   I have seen too many clients who think that the outsourced providers are the only party shouldering responsibilities.  In fact they themselves are equally liable to provide the necessary direction, management and rectification whenever they see problems ahead.  Laying the blame on the outsourced provider only proves how incompetent the client really is.  To me, they share the biggest part of the blame.

Most outsourced relationships fail because of issues like this.  There is nothing wrong about the concept.  Technical competencies maybe, but it could easily be rectified by trainings and investment.  I see time and time again that my clients fail to grasp the right techniques, processes and mentality to manage the providers.  Whenever catastrophes appear like the water bill foul-ups cases above, they pass on the blame and ask for more money from the top!

 

 

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