Business Process Outsourcing – What to Outsource?
We will take an example of a small educational institution or training center to understand Business Process Outsourcing better. The basic requirements that keep it running are: proper management; advertising; teachers; study material; and proper infrastructure. You also need legal services from time to time.
You make decisions on how to run the training center; what all courses to include; target the client base; and much more. Management is an important factor that you cannot put in others' hands. You need to advertise to stay in the market. You have the option of keeping an in house printing press or to get the posters and flyers printed outside. I guess you get the point here. As this is a non-regular process, you can always have a third party help you. Hiring a third party advertising company benefits you as it knows what it is selling and how you can save on costs. If you were to advertise on your own, you will have to spend time and resources on finding out competitors, what's selling, the price of different types of campaigns, and much more. Outsource the process to someone reliable and you save both time and money.
Legal problems also pop up at some point of time or other. Your own group of lawyers means you pay them monthly - even if there are no problems. There are several Legal Process Outsourcing (LPO) units that handle legal issues of many small businesses who do not wish to hire full time lawyers. Similarly, if you ask your trainers and teachers to write material and books for your clients/students, you will be wasting their time that they would have been using to prepare their lectures. Processes like writing can also be given out as they are not a constant process. Once the material is prepared, you can use it for years with some editing in between.
The Trick: Identify all processes in your business; think in terms of time, money, and, frequency of these processes; and let third parties handle the processes that you think will save your resources. Don't hand over confidential processes like future strategies, etc. unless you are very sure about the third party.
NOTE: Before outsourcing a process to any third party, make sure you have enough details about its past, reliability, and ability to handle the process. Do not forget legal agreements offering you control over these third parties (in case they default). I also recommend (periodic) personal visits to their premises so you are sure that they are really working – serving the purpose – offering you the benefits of business outsourcing.