Thursday, May 12, 2005

Dedicated-employee Outsourcing Model

The dedicated-employee model has been around for years, but most outsourcing buyers are well-accustomed to the unitize-based pricing. Both models have advantages and disadvantages, but I will be focusing on the dedicated-employee as I feel it is the more superior model.

"This model provides for the accumulation of knowledge and experience that is necessary to deliver high-quality end-results while successfully performing more sophisticated tasks," Outsourcing Solutions Inc's COO Jeff Hintze says. "We recruit, test, co-train, and manage these employees while constantly working with our clients to optimize the value of the relationship."

Because the employee is 100% dedicated to a specific task, he will ultimately be an expert in performing this task. Then his experience and expertise become part of the company's valuable assets.

Companies often go into outsourcing with the expectation of retaining control of how project processes are carried out, but not the facility and human resource management which are the responsibilities of the provider. With the dedicated-employee model, the client receives daily activity reports and has direct contact with the employees; this facilitates resolving potential issues with regard to the tasks assigned to each employee and thus increases productivity and limits turnaround time.

Wouldn't it be nice if you had personal relationships with your employees? I strongly believe that having good personal relationships with clients will affect the working relationship positively; the same could be said with the employees. Establishing a direct contact with them when addressing issues and being able to say "thank you" when they perform well are important factors in developing great motivation.

The dedicated-employee model, therefore, is much better at helping businesses become successful than other outsourcing models because it provides them with dedicated and hardworking employees that are specifically suited to their needs. Think of this model as having your own virtual offhore facility. You gain all the benefits of having an offshore office without the cost and headache of actually setting up a facility on your own.

Friday, May 06, 2005

The Positive Effects of Outsourcing

In today’s business world, the word “Outsourcing” is being heard more and more. It is being touted by some as the savior of companies while others treat it like a plague spreading through the business world stealing jobs from Americans. Whatever your personal view on outsourcing, it is clearly something that can no longer be ignored.

In fact, if businesses wish to remain competitive it is almost imperative that they outsource. With proper planning, outsourcing can save resources such as time money energy and even produce a higher quality end-product. How these savings are achieved will be explained point by point below therefore helping you understand why every company should consider outsourcing their non-core business operations.

Save Money
Let’s assume you currently have 20 employees doing routine data entry tasks; you would probably need around 1000 square feet of office space, which might cost you around $30,000.00 per year. You would also need 20 workstations, tables, chairs, etc. -- which might cost you another $30,000.00. You, of course, also have to include your salaries + labor burden and let’s not forget our other overhead items (such as electricity, ISP, telephone, water, office supplies, facility maintenance, computer repairs and upgrades, security and so much more) which we will round of to a conservative annual cost of approximately $500,000.

You can't manage twenty people all by yourself and hope to stay focused on your top line (well, you can, of course, if you work 18 hour days and quality isn't a concern for you), so you need to hire a Supervisor to manage the team and that's going to cost you as well (let’s say $40,000 per year). And then there’s the cost of hiring technical support for those guaranteed network administration and PC troubleshooting problems that will occur (another $40,000). Should I continue?

By outsourcing this work to a company who specializes in providing dedicated employees to your company, you won't have to worry about all of those issues, plus it will only cost you a flat fee of $1000/month per employee! This results in a direct cost savings of almost 70%, but for argument’s sake, let’s make it 40% to allow for any unforeseen costs that will undoubtedly creep up. Cutting costs by 40% is quite incredible, right?

Save Time and Energy
We are all familiar with the headaches that come from managing our human resources. The less people we have to directly manage the better. This frees you up to focus on other important business issues such as planning for business growth. You should be focusing more on the competition, refining business processes, and marketing, rather than spending your time interviewing people, performing quality reviews, dealing with employee problems, etc.

Outsourcing allows you to grow your staff without increasing the HR headache that can come from a larger staff.

Higher Quality End-Product
Because you are outsourcing a specific part of your process, the outsourced staff usually only have to worry about one single, repetitive task. Because they are so focused on that one task, they become very efficient and effective at performing this task resulting in a higher quality end-product. Also, because they are physically removed from your office, they don’t have to deal with the other distractions that can arise in an office and can remain focused on the task at hand.

With the money saved by outsourcing, specific quality staff that were once unaffordable can now be added to the process, also increasing the likelihood of a higher quality end-product. Finally, if you are outsourcing to a company specializing in your type of project, you can obviously expect a much higher quality end-product, since they themselves are experts in performing these tasks.

Once of the best outsourcing companies in the Philippines, based in Cebu City and known for its quality staff and superb customer support is Phil-Am Outsourcing Solutions Inc.

Visit outsourcing services to know more about the company.

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