The way we do business has evolved a great deal in the past thirty years. As technological advances have enabled an increasingly global approach to trade, so new methodologies and practices have developed. Outsourcing is one such methodology and, though it sometimes causes controversy, it remains a popular cost-cutting measure in business.
Cutting costs in business is one route to a healthier bottom line, and is proven to work well when combined with other approaches, such as the increase of efficiency. This is something that can be best achieved through the administrative side of your operation. With contracts and outsourcing agreements being central to any commercial organisation, increasing the productivity of these documents can yield significant benefits on the wider scale.
What is outsourcing?
As the name suggests, outsourcing is the practice of sourcing skills or service from outside of your business. It is the contracting of external parties to perform tasks, or supply services that would otherwise be an internal job. This is different from your suppliers, who are outside parties that bring in what you need for your business to operate.
As a business practice, outsourcing became very popular during the 1990s, with a growing number of organisations adopting it as a cost-saving measure. Since then, its use has become a fairly standard method of cost management. For larger corporations, the move to outsource labour costs by contracting work overseas can be controversial, having a potentially negative impact on domestic employment levels. However, in terms of the global free market economy, it is also seen as a practice that increases competition, encourages value for money, and increases the focus on customer service and experience.
Outsourcing agreements are the core of the outsourcing method. These are vital contracts that define the requirements and parameters of the tasks being outsourced. The roles and obligations of all parties are clearly set out, and terms are agreed. These agreements can range from the relatively simple to the exceedingly complex, depending on the businesses involved, their respective locations, and the nature of the tasks being outsourced.
What impacts the productivity of outsourcing agreements?
Individually, outsourcing agreements require some management to ensure their productivity. Each needs to be regularly reviewed, with key milestones and events monitored and followed up – including renegotiation points. Most importantly, each agreement must be periodically analysed to determine whether obligations are being met, and value for money is being provided.
That already represents a lot of work, but when we multiply that contract management task list to reflect the number of outsourcing agreements held by organisations of any type or size, it quickly becomes clear that unwieldy Contract Management Systems can have the biggest impact on the productivity of outsourcing agreements. This is because personnel become bogged down in the minutiae of day-to-day contract administration and management. Human error becomes a greater factor, and important deadlines are more likely to be missed or delayed. Such issues can delay entire projects, and lead to increased costs that negate the savings made by outsourcing in the first place.
In addition, the issue of data security becomes much more significant for any business once outsourcing of any task or service is agreed – particularly when outsourcing to organisations overseas. Any point at which your business connects with another creates vulnerability in terms of cyber security and the integrity of commercially sensitive information, and this is only amplified when forging agreements with businesses operating in different territories. This is because legislation and regulation governing business practices and data handling vary from country to country. The time it takes to ensure both internal and external compliance across multiple territories is time that reduces the productivity of your outsourcing agreements.
Finally, communication issues can negatively impact both the productivity of your outsourcing agreements, and your client relationships. Delays caused by time zone, language, and cultural differences can cost money and goodwill. Left unresolved, and with multiple outsourcing agreements in effect, this can stray into the area of reputational damage very easily.
The Outsourcing Value Management software solution
The practice of outsourcing remains a viable and effective business methodology, so it is vital to implement a system that allows you to take tighter control of your outsourcing agreements. Efficiency is the key to greater productivity, so streamlining your collection of outsourcing agreements is the way to increase their value for money. The very best of these software solutions – such as Symfact – address all of the issues associated with the outsourcing process in a customised way, creating a faster system, with a high degree of automation, and less scope for error.
- Browser-based access to a centralised repository
The very best Outsourcing Value Management software is browser-based, providing access from anywhere, using any device that is connected to the internet. These platforms are built around a centralised repository, in which all contracts are digitally stored. This makes all documentation instantly available to those enabled through the permission-based authorisation feature. All authorised personnel have access to the latest versions of documents and language, and editable templates are available through a standardised library.
- Multi-language, locale, and currency
When you have services and tasks being carried out across multiple territories, you need a management solution that facilitates multi-lingual, global access, with different currencies supported. Outsourcing Value Management Software incorporates these features, enabling you to comprehensively streamline your international outsourcing agreements.
Previous management solutions may have included the use of shared spreadsheets or shared document sites, but these fail to deliver the level of efficiency required to ensure the productivity of the agreement collection. They still rely heavily on personnel time and input, and the risk of human error is high. With a central, digital document repository that is optimised for business operation in multiple territories, these issues are resolved.
- Streamlined communication
One of the quickest and easiest ways to achieve a higher level of efficiency in any system is to streamline the activities involved. That means introducing a high degree of automation, and this is exactly what Outsourcing Value Management software delivers. Since communication is an integral part of outsourcing, this is the place to start if you want to see big, positive changes in a short timeframe.
When outsourcing part of your business, it is imperative that your needs are clearly understood, just as it is equally important that the third party is clear about what they are able to provide in terms of service. This open communication needs to be both timely and ongoing if your products and services are to be received by your customer base in satisfactory fashion. Your business may once have struggled to manage this using email and telephone discussions, but Outsourcing Value Management software automates many of those tasks, with workflows, alerts and notifications, and e-signature facilities. That means you get the information and documentation you need, when you need it, and your customer relationships are improved.
- Accountability, transparency, and oversight
Efficiency is assured when you have real accountability and transparency throughout your outsourcing agreement system. When all involved know what they are supposed to be doing and when, and their actions as users are fully visible, then it is firstly easier to stay on track, and secondly easier to identify and rectify problems, sticking points, and bottlenecks in the workflow. This level of oversight is central to the best Outsourcing Value Management software systems, precisely because it has a significant impact on the productivity levels of these documents.
- Cohesion and compliance
When you embark on outsourcing, it is easy for parts of your enterprise to become fragmented and, as a result, difficult to manage. These difficulties and fragmentations can be amplified by international distances and time zones. Along with the issues this creates for day-to-day operations, this tension risks a decrease in compliance – both with your own corporate governance, policies and procedures, and with international and domestic legislation and regulations.
The streamlined format of Outsourcing Value Management software allows for greater cohesion between your operation and the companies to which you are outsourcing. Better, faster communication, automated workflows, and standardised, centralised agreements fortify your association, and galvanise your business relationship. Compliance obligations are made clear, and are regularly reiterated. This means that, when problems do arise, they can be addressed and resolved swiftly, and in a pro-active manner that reaffirms your professional partnership.
- Third party risk management and data security
Entering into an outsourcing agreement substantially increases the need for third party risk management within your business. An important part of that is data security. Outsourcing Value Management Software packages can help to resolve both these issues, with permission-based access control, automated workflows, and a centralised contract library.
- Permission-based access control – This ensures that, while the software is accessible from any internet-connected device, only authorised personnel are admitted to the platform. In addition, each access is recorded and traceable, increasing transparency and accountability, and adding to the protection of your data.
- Automated workflows – These ensure that actions are correctly assigned to the relevant person at the right time, covering both internal and external personnel. This helps to mitigate risk when dealing with a third party.
- Centralised contract library – Providing standardised contract templates and clauses means that personnel tasked with negotiating and creating outsourcing agreements are able to include all up-to-date language designed to mitigate third party risk for your business. This includes data protection obligations and recovery plans, in the event of a cyber security incident for either party.
- Obligation and clause control
By digitising your outsourcing agreements, Outsourcing Value Management software enables you to manage each contractual obligation as a separate work-unit. This means you can easily ensure that the agreed terms and expectations are clearly defined and visible to all parties. Supporting documentation is also linked, providing full transparency and increased accountability.
Taking control of individual obligations and clauses in this way is important for your outsourcing agreements, because each obligation has a different frequency of tasks associated with it, and occur on different timescales. Without obligation management on this granular scale, it is very difficult to maintain the kind of oversight that ensures your outsourcing agreements are functioning at their most productive level.
- Customised reporting for data analysis
Customised reporting for data analysis goes hand in hand with obligation and clause control on a granular scale, because it provides the ability for you to review and assess the productivity of your whole outsourcing agreement collection, at every level. By fully customising your Outsourcing Value Management software package, and its reporting feature, you are able to generate accurate and actionable data. This can be used for periodic auditing, and ongoing monitoring, and can help develop decision pathways for a variety of scenarios.
The real power of the data analysis opportunities provided by the customised reporting feature lies in the level of detail generated. This feature can determine which agreements are ready for renegotiation, which are providing value for money, and which are becoming problematic or unhelpful. It can highlight which workflow points are inefficient, and detail the impact of notifications and alerts. With these reports also being automated, the risk of human error is reduced and, instead, risk is mitigated by the provision of up-to-date, accurate data snapshots.
Outsourcing Value Management software for the future of your business
As the world of international trade grows ever smaller, and technology creates even more opportunities for our competitors to advance, it has never been more important to embrace the facilities provided by Outsourcing Value Management software.
To survive in this economic climate, businesses are under increasing pressure to embrace leanness in their operation, and flexible, forward-thinking in their approach. Leanness, forward-thinking, and flexibility are the key ingredients for efficiency, and efficiency is required for increased productivity. The very best of these Outsourcing Value Management platforms provide support for taking your business to those necessary levels. Call Symfact today, to book your demonstration of Outsourcing Value Management software, and take the first steps toward increasing the productivity of your outsourcing agreements.