Question

As the HRD Director in your company, you need to decide whether to outsource your training or develop and deliver the training in-house. Discuss the top three factors that you would consider and provide a justification for each.

Answer 1

As an HR Director, I may determine which business processes are good candidates for outsourcing and I would ensure the success of an outsourcing project in the following ways:

• The business processes must be less critical in nature that is being outsourced.
• IT Services Projects, business transaction processes such as managing the Company’s credit card cycle, various other support functions such as accounting functions, etc. could be outsourced as they are less critical in nature.
• I need to check if the outsourced company has reliable technology and telecommunication in place to help the Organization with the Outsourcing elements.
• Considerations with regards to the labor cost and foreign exchange rates should also be taken and such business processes could be good for outsourcing which regards both of these factors.
• After analyzing the internal processes and upon inventory check, I can determine whether a particular business process is suitable for outsourcing.
• If the outsourced companies provide the advantage of the low operating cost as compared to what it could have incurred to the Outsourcing Company, then in that case I can consider outsourcing as a good option.
• Further, in case where I expect more flexibility in the business processes and wishes to have a better customer responsiveness behavior in place, outsourcing the same could be a good option.
• I also need to check whether outsourcing helps in bettering the quality standards that is followed by the Organization otherwise. If yes, then outsourcing in such a case could also be considered as a good option.
• The various stages of outsourcing should be taken into consideration and analyzed thereupon if it makes sense to outsource the business processes.

Thus, this is how I would determine the soundness of business process outsourcing in order to ensure the maximum benefits to the Organization especially with regards to the contingency plans and hence these business processes could be outsourced to gain various advantages.

The top three would be as under:

Criticality of the Operations: If the operations have less criticality segment in it, it shall be safer to outsource the same to certain other agency so that my Organization can focus upon its core business.

Nature of the Operations: The supporting functions could be outsourced so that efficiency of the pay-roll workforce is maintained to specialize and concentrate upon the primary functions of the business. This specialization shall in turn raise the productivity of the employees and on the part of the Organization, the earnings could be maximized by tapping the core functions of the Organization.

Cost of Outsourcing: If the cost of undertaking certain activity all by ourselves is more than the cost involved in outsourcing of the same, besides the consideration to factors like time and efforts of the employees, then it makes more sense to outsource the activity and thereby maintain efficiency in the business operations.