Business Analysis Toolkit

Many companies outsource their businesses to third parties, especially short-lived or short-term projects that do not really need heavy investment in terms of infrastructure. It is precisely because of this that there is a need to develop project outsourcing metrics. The implementation of these metrics ensures that the quality of expected output is met. Before moving on to this, one must understand the difference between outsourcing and off shoring. Moreover, one must also understand why outsourcing is done at all.

Outsourcing is a business strategy in which a company passes on its business to a third party while having the choice and ability to retain its name. In essence, outsourcing is about hiring another company to do its work, and the BPO company—this stands for Business Process Outsourcing and this is the company that takes the job—is like a ghost company. The BPO company operates under the name of the outsourcer and meets its demands.

For example, a certain shoe company does not need to manufacture its shoes. It is understood that the shoe company relies heavily on it shoes to survive. However, the company also needs to focus on research and technology to come up with better shoes. So what it does is it actually hires another company to manufacture the shoes. However, the BPO company that manufactures the shoes ensures that it meets the specifications of the shoe company because it is the shoe company’s name that is at stake.

Another example is hiring. Many companies do not need to invest in a Human Resources Department, especially if the process is project based. What they can do is hire a third party company to hire employees for them. This means lesser work for the people. After all, the company will not need to hire again. Off shoring, on the other hand, is a business strategy in which the company builds its own facility outside its home base. There are several reasons why this is done. The primary reason is global positioning. Through off shoring, businesses can ensure global presence, especially if they have bases in several countries. Another one is labor cost. This is especially so if it is a manufacturing industry because human labor is cheaper in other countries.

In terms of metrics, the very essential one to consider is quality. Quality speaks so much about the product and the principles and integrity of a company. If you will outsource a project, make sure you have a well-defined set of quality guidelines and principles. It is not right for companies to just shove a project or job to a BPO company without specifying what is expected of the employees in terms of output.

In summary, companies should be very aware of the caliber of tasks that the BPO company will do for them. Without setting expectations right, the company will take great risks in terms of retaining its customers. The implementation of project outsourcing metrics will do just that. This is precisely why these metrics have to be laid down to ensure success for the companies involved.
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