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Article By Vibhav Nuwal
Transition Management is one of the most important roles in any organization involved in outsourcing or off-shoring. A Transition Manager is responsible for migrating the function or the process from the donor location or organization to the outsourcing organization. Because of the nature of the role, a Transition Manager needs to have a variety of skills and competencies - she needs to be a good communicator, as the role requires extensive interaction with the clients; needs to have strong Project Management skills, as most migrations are complex projects that require expert management skills; she needs to be comfortable in working in a cross-cultural environment, as most often, the donor teams are based overseas; needs to have a very good understanding of the existing processes and technologies as these play a critical role in the off-shorability of any function.
The concept of outsourcing started with Ross Perot when he founded Electronic Data Systems in 1962. EDS would tell a prospective client, "You are familiar with designing, manufacturing and selling furniture, but we're familiar with managing information technology. We can sell you the information technology you need, and you pay us monthly for the service with a minimum commitment of two to ten years.
BPO is the act of transferring some of an organization's repeated non-core and core business processes to an outside provider to achieve cost reductions while improving service quality. Because the processes are repeated and a long-term contract is used, outsourcing goes far beyond the use of consultants. If done well, BPO results in increasing shareholder value. The main difference between BPO and more traditional IT outsourcing is that BPO offers companies a way of achieving transformational outcomes much more quickly. In a typical BPO contract, a service provider takes over a specific corporate function. Effective BPO encompasses much more than just changing who is responsible for performing the process. In BPO, the outside provider not only takes on the responsibility to manage the function or business process, but also re-engineers the way the process has been traditionally done.
Outsourcing became a catchphrase in business areas in the 1990s. It was a well appreciated addition to the business lexis This market comprises 9 business functions of human resources, procurement, finance and accounting, customer care, logistics, engineering/R&D, sales and marketing, facilities operations and management and training. Outsourcing is a corporate strategy that companies adopt to enhance competitiveness of the company. By outsourcing non-core part of business operation and only concentrating on the core competence, companies can increase the productivity and efficiency in management.
Outsourcing as strategy is not new. Some examples of Outsourcing, such as GM and EDS, Xerox and EDS, Kodak and IBM, are more than a decade old. Over the years, the scale and scope of Outsourcing has evolved considerably. It has also migrated from primarily Fortune 500 companies to large and midsized companies.
Since the 1970s, many Western companies began manufacturing products in offshore locations such as Japan, Korea, Thailand, and Taiwan. Despite the relatively high cost of transporting the goods by sea and air, it was cheaper to make them in the Far East (and in Mexico after the NAFTA treaty) than to keep manufacturing in the United States or Europe.
Outsourcing as an industry is rapidly coming of age. The February 2005 issue of Harvard Business Review noted the following for Outsourcing: "Outsourcing has become strategic - yet many executives remain unprepared. A new era of capability sourcing will trigger organizational redesign and a new set of managerial skills." The number of companies providing outsourcing services is increasing rapidly, methodologies and procedures are maturing fast, and more and more people are hopping on to the outsourcing bandwagon.
An important fallout of this maturing of the industry is that one can now consider making a career in outsourcing seriously. While call centre or operational jobs are available aplenty, not many middle level managers or highly qualified people from the more traditional banking, accounting or other industries are willing to take them up. Part of this is because outsourcing is often considered synonymous with call centers, due to early growth and publicity in that area. However, changes in the industry are opening doors for everyone. Consider these significant changes, and how they are throwing up new opportunities.
The other day I was interviewing this guy for a part time web content development consulting project. This guy is very sharp, young (about 25 years) and based in INDIA. Since I am based in USA, I usually chat online using yahoo messenger. I was interviewing him for my company's BPO operations. I was interested in outsourcing some content development for this website. I wanted him to develop one page content for every BPO company in our directory.
The chat went like this: