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Before anything else, security should always be the main priority of companies that are planning to outsource. Nenette Day, an FBI special agent, shared two important tips that companies should adhere to before outsourcing.

1. Know the rules and regulation of outsourcing countries
2. Verify the implementation of these rules

Aside from that, companies should also ask vital questions before signing an outsourcing deal. These questions should help firms in finalizing their outsourcing decision.

Questions that should be asked questions before signing an outsourcing contract.

1. Can the company risk the loss of this data?
2. What are the liabilities if this data is lost?
3. What are the notification requirements upon losing customer data?
4. Is the company being outsourced to willing to go the distance if its help is needed to chase down a criminal?
5. How long could a prolonged legal battle in a foreign country cost?

BPO is commonly defined as the leveraging of technology or specialist process vendors to provide and manage an organization's critical and/or non-critical enterprise processes and applications. Some of the common tasks in BPO include payroll, call centers and accounting. The main goal of BPO was to let firms concentrate on their "core business" meaning that with these so-called mundane tasks out of their hair, they can focus more on the things that they do best.

On the other hand, Knowledge Process Outsourcing or KPO involves "high-end" tasks being outsourced. These tasks are defined as high-end ones because it requires in-depth analysis and perspective. Some of these tasks include legal work, research and development, web content, design, and many others.

Firms that are considering outsourcing should therefore be clear on what kind of outsourcing they really want. If they want to focus on their core business tasks, they should opt for BPO. If they want to have added help on their business then they should consider KPO.
Posted by Elaine Ramos The art of "small talk"
04 OCT 2006 17:03 EDT (21:03, GMT)
I previously mentioned that culture difference is one of the major barriers when it comes to outsourcing. This barrier could be beaten through the use of "small talk" in training.

Nowadays, training in outsourcing and offshoring destinations does not focus only on accents and pronunciation. Agents in these locations are now being briefed regarding American culture and the current events in the US. This approach aims to bridge the culture difference between customers and outsourcing workers.

Aside from that, learning and understanding the culture of their clients could be a way to bring out better customer service as well as making sure that there is minimal misunderstanding during transactions in outsourcing.
Posted by Elaine Ramos Outsourcing IT Security
03 OCT 2006 20:25 EDT (00:25, GMT)
IT Security is another function which is now considered to be a task commonly outsourced.

A survey conducted by the Computer Security Institute and the FBI has shown a growing number of offshoring and outsourcing transactions in terms of IT Security. Here is an overview of the survey results:

• Firms with an average income of less than 10 million dollars outsourced 8% of their security functions this year revealing a 4% increase from last year.
• For mid-size companies earning within a range of 100 million to 1 billion dollars, 13% of these firms outsourced their security functions this year (7% rate last year).
• Large corporations with more than 1 billion dollars worth of revenue revealed that they outsource 15% of their security functions this year, showing an increase rate from 9% last year.

Though the rates have shown growth in terms of offshoring and outsourcing IT security, it does not mean that there is really a "hype" in outsourcing IT security. The recent results just show a stable growth indicating a steady rise in the firms opting for outsourcing IT security. The overall rate shows that 39% of the firms surveyed have outsourced certain IT functions this year, up from the 37% rate shown from last year's survey results.
Posted by Elaine Ramos Indian Outsourcing Shows Growth
02 OCT 2006 19:22 EDT (23:22, GMT)
The Indian Outsourcing Industry seems to be getting bigger and bigger.

The Quarterly financial reports submitted by Infosys Technologies, Satyam Computer Services, Tata Consultancy Services and Wipro Technologies revealed that the number of companies offshoring to India is growing and there is no indication that it will cease.

One of the reasons mentioned in the report indicates that there is a growing desire by American and European companies to diversify their services partners, ensuring that low-cost Indian vendors get a piece of the action. This means that more companies do not fully outsource all the functions in their firms, instead opting for different offshoring vendors to handle certain tasks.

Though that may sound like good news for the Indian offshoring industry, there are still hindrances that the Indian industry needs to overcome. Rather than view it as a problem, the Indian outsourcing industry should take it as a challenge in their growing industry. One of the challenges that they must overtake is the maintenance of their price advantage. One of the reasons why foreign investors are coming back to India is because of their low salary rate. If Indian companies lose this advantage, foreign investors might not come back because the savings that they are supposed to have would be thrown out of the window.

The salary rate in India is increasing by 15% annually and, in order to keep productive workers from seeking one high-paying job to another, they need to come up with something that would keep these employees from doing so. This is one of the major dilemmas in the Indian offshoring industry that they must solve so that their growth will continue.
Posted by Elaine Ramos Culture difference in outsourcing
29 SEP 2006 08:29 EDT (12:29, GMT)
Problems and outsourcing seem to go hand in hand if you read all the reports that tackle offshoring. One main problem in outsourcing is culture difference. Culture difference occurs if people working in these outsourcing contracts come from different backgrounds and beliefs which could result in conflict in the workplace.

Culture difference could be seen in the following areas:

• difference in communication styles between offshoring employees and onshore employers
• difference in terms of approach when finishing tasks
• difference in attitudes regarding conflict
• difference in decision-making skills

Even if culture difference is seen as a major problem, there is still a key in answering this issue. As for me, I think the key here is compromise. After all, these people have a common goal in mind, and by keeping this common goal on the surface, people will be able to give in and adjust to the situation. It's just a matter of making this relationship work, which would make both parties happy and satisfied with their offshoring deals.
Posted by Elaine Ramos Multi-sourcing equates to trouble
28 SEP 2006 00:02 EDT (04:02, GMT)
Multitasking in work seems to be the secret in order to survive in the business world. If this concept could be applied to outsourcing, this would equate to multi-sourcing. If this is the case, does that mean that multi-sourcing might also mean success?

Let's take a look at the survey results which tackled the future of outsourcing. Here are some of the results:

• The worldwide market for IT and business process outsourcing (BPO) services will increase from $582 billion in 2004 to $769 billion in the year 2009.
• 60% of outsourcing firms expressed plans to sign contracts with three or fewer vendors (based on the survey response of 758 companies conducted last year).
• In the year 2008, two-thirds of the IT outsourcing contracts signed will be done to achieve short-term and cost-focused objectives

The results show that more and more firms are considering multi-sourcing. Firms nowadays are not content to outsource only one facet of their functions and opt to outsource many bits and pieces of their business function to third parties. At first, it seemed like a good idea, but as time passes by, the challenges that it brings could harm the company in the future.

This is in contrast with the true aim of outsourcing which is to lessen the firm's managing tasks on such matters.
Posted by Elaine Ramos Transforming outsourcing for call centers
27 SEP 2006 11:36 EDT (15:36, GMT)
Call centers have been considered the first functions to be outsourced. Now that outsourcing is now changing and evolving, call centers are also aiming for a different side of outsourcing.

The normal or regular goal of outsourcing is to reduce over-all cost, but this time a new goal is being introduced. This new goal's focused is transforming call centers into a "profit-generating division" of the business. The integration of both calls in the call center industry is now known as "transformational outsourcing."

One of the ways to promote transformational outsourcing is the hiring of Universal Agents. In a normal call center, there are certain requirements for a call center agent, including good communication skills and other talents needed for the task. In the case of universal agents, special requirements like multi-tasking are required. Agents who could manage several duties like customer care, technical support and sales are considered an invaluable resource to firms. This is because their skills could add up to the overall aim of reducing costs and adding up of business value.

Outsourcing providers who successfully introduce the concept of universal agents in their service are able to serve a much larger market and raise their value because these universal agents are able to deal with different problems and tasks naturally assigned to different call center divisions and agents.

Other ways to raise the value for outsourcing providers include:

• employing of multi-lingual agents
• establishing a strategy intended for cross-selling and up-selling
• implementing efficient back-office processes like shipping and handling returns

Here are seven of the most "deadly sins" in outsourcing. This list would help companies to be more aware in conducting their outsourcing deals.

1. Failure to Monitor -- Before plunging into the outsourcing transaction, it would be better to know exactly how the company will be able to monitor their outsourced tasks. Monitoring is important because the company should be able to keep tabs on the process and evaluate if they are indeed doing well in their outsourcing transaction.
2. Too Much Expectation -- Being realistic should always be the key in outsourcing. It means that one should not have false notion that outsourcing will be the "sole" solution to a company's problem. This would only work towards a firm's advantage if the firm has already considered the pros and cons in the situation, thus making them aware of the ordeal up ahead.
3. Unwise Project Assignment -- Assigning what kind of project and where it should be outsourced is a critical part of outsourcing. Firms must first decide which functions should be considered for outsourcing and where their ideal place to outsource might be. "Blindly" outsourcing is an unwise business decision.
4. Outsourcing Vital Functions -- The main purpose of outsourcing and offshoring is to help the company focus on their central functions. Unfortunately, some firms do not realize this and still continue to outsource valuable information and tasks. This kind of attitude in outsourcing leads to unwise and high-risk transactions.
5. False Assumptions -- Before plotting the contract in offshoring/outsourcing, it is better to have logical conclusions as well as flexible terms that will make it easier deal with future problems. No one could can what will happen in the future and it is easier to deal with it if it has been anticipated and planned ahead.
6. No Focus on Service -- Many firms assume that once they have signed the contract, there is no need for them to interfere. It is vital that firms monitor these activities on a daily basis, focusing on service. This is what most offshoring vendors focus on and it should be monitored because the company's name and reputation is at stake.
7. Not Staying Through the End -- The contract between firms and offshoring vendors should stick up to the end. For firms, it would be wiser to include the offshoring vendors in the ending phase so that they will still provide the service that you need. A provision stating what should be done in case the partner experiences business downfall should also be discussed.

Though cost-saving remains the number one drive for outsourcing, companies should learn to be able to look beyond this reason and look for other reasons which could make their outsourcing deal more than just saving money.

If you are wondering about the most common reasons why companies outsource, here are some of them:

1. Cost-savings
2. Flexibility in increasing/decreasing IT capacity
3. Knowledge transfer and industry-specific expertise
4. Reliability
5. Removal of fixed costs
6. Operational expertise
7. Better support for internal users
8. Lack of available in-house personnel
9. Speed to market
10. Improved IT performance