Global Outsourcing Key Considerations – Part 4

In this final blog in our series on global outsourcing we focus on some key internal areas of consideration which are critical but, in our experience, either overlooked or addressed poorly.

Why Talent and Human Resource Management is Key During the Global Outsourcing Process.

Once the decision is taken to embark on a transformational program such as Global Outsourcing, and everyone from C-level to team member has understood the importance and risk of the program and their specific role in the project, we enter the phase of execution. At this juncture, the impact of the plans on the teams and the human challenges they present will become magnified and, if not planned for and managed well, can derail even the most carefully thought-out of projects. Getting these elements right is critical and, if not managed with focus and agility on a daily basis, will represent potentially the biggest headache for the project leadership.

Key issues to consider at this stage are:

• Secondments: It is clear that global outsourcing programs will cause a certain level of individual and team stress, often merely through fear and mistrust of the unknown. These challenges can be reduced through implementing cultural awareness and mentoring training but additionally, and critical to the success of the program, is the development of a secondment plan – sending people to and from the chosen outsourcing entity. This not only facilitates process transfer but will also facilitate the development of the necessary cross-company relationships, cultural awareness and basic trust in the partnership – a trust which is so often missing at the outset such projects.

  Central to the success of any good secondment plan is buy-in from senior leadership and team members who will need to offer up their best people to be 100% committed to the program – whilst at the same time maintaining the delivery or service levels of the current environment. It will require a great deal of “hands-on” flexibility and agility from the project team to adapt the secondment plan to the real-life requirements of the program as it evolves.It is also really important to choose secondment candidates carefully – not only do they need to be process experts but simultaneously have to be ambassadors for the company, the program and, in addition, need to be culturally aware. This combination of skills is a rarity in most companies and finding this combination in an often “threatening” change environment can be difficult.

• Attrition/Retention: Most carefully planned projects will usually have a workstream on managing attrition in the “home” environment – however it is important to think about this in the outsourced/offshored environment as well. Often, due to language or differing management styles or simply a set of cultural blockages, people will decide this program is not for them and move on – particularly if the local labour market is tight. If the focus on attrition is “undercooked” then it can be a major cause of program failure due, not just to a lack of resources, but can also potentially lead to spiralling program costs with extra training, additional secondments and added replacement resources all required both at home and in the new environment.

  

  An area of specific focus should be potential attrition of key skillsets in the “home” environment (which long term may be a desired outcome) but attention to retaining these key skillsets in the transition phase is fundamental to the delivery of the program due to the criticality of process knowledge as a success factor for the project. Keeping on top of this is hugely important and specific HR programs to hold on to these key skillsets through reward schemes and the structured management of each individual involved will be necessary.It is also extremely important to have retention plans for key leaders in the organisation, some of whom may feel disenchanted and at risk – and even the project leadership which is 100% focussed on delivering a successful program may well have some concerns for their own future despite the fact they are leading a high impact program such as this. Once again, specifically tailored career pathing and/or reward schemes are important here and special care will be needed if the individual leading the project has already been identified as a C level leader of the future or is critical to the client base.

• Outplacement: During the project execution phase there will normally already be a plan for a certain level of workforce reduction in the “home” environment. This, as we have said before, will create a level of uncertainty and fear which is understandable and has to be managed well if it is not to derail the project. A key element to managing this risk well is a carefully designed outplacement program for those concerned. Teams will want to understand how they or their colleagues will be treated, and a well thought-through outplacement program is essential to keep people as motivated as possible. Additionally, it will help to avoid workplace conflicts both on an individual basis and at the team level. Wherever possible, additional individual and/or team mentoring from an external source is advised to help people accept the consequences of the program – even if the individuals concerned are not directly affected.

Pack and Ship

Once your project to outsource, offshore or centralise work is underway you will face the task of packing and shipping the selected work. The ability of your organisation to handle this will depend upon the experience in the organisation, the mood around the specific offshoring initiative and the strategies that you put in place to support this phase. Assuming that you have made good decisions about what work to move then this phase is essentially a case of describing what you do in sufficient detail to train new people and providing the correct equipment and infrastructure for them to deliver a service at least as good as todays.

Here are a few of the factors to consider in this phase:

• How are levels of service currently measured? If there are not robust and accepted metrics in place that describe the current level of service, then you will not be able to make comparisons once the work is shipped. As you pack the work to ship make sure these are in place, accepted and communicated as the baseline before the move.
• How well do you transfer knowledge to people in new roles or who are new to your organisation? Your ability to define the work, train people and give them access to on-going support will depend upon what systems you currently have in place for knowledge transfer and training. With a move, you have the added challenge of needing to work across geographies and perhaps, company boundaries if third parties are involved. Detailed documentation, effective training and ongoing access to knowledge are key to success. This may also require you to establish new on-line collaboration and learning tools.
• To what extent do existing teams and functions trust each other? When this is at its best then work can flow without friction through an organisation. Once you pack up work and ship it how can you ensure that there are steps in place to build trust between the new contact points? Solutions such as rotational moves of leaders can go a long way to help build trust between teams.
• When you ship work it will take some time to unpack and for services to be fully functional. During this period, you need a parallel approach to ensure there is no disruption to the business and this needs to be as short as possible to avoid unnecessary costs.

There are many more things to consider when it comes to packing up the work and shipping it. By being broad in your thinking and systematic in your approach you can ensure a good result for this move and create a capability for future moves.

Project Management

When embarking upon offshoring, outsourcing or centralisation of work there will be multiple projects and workstreams to manage with high degrees of interdependency. An approach to project management that balances rigor with outcomes and is supported by strong communication will be key to the success of your overall program. If you don’t already have these skills in-house then acquisition of them should be a key consideration as part of your processes for selecting partners to work with on your program.

Some factors to consider in your approach to project management:

• Strong beginnings and strong endings to projects ensure that what happens in the middle happens well. A clear and simple objective for each project along with the right team and clear scope will help build success. Being prepared to have succinct and open management review of projects can ensure that the approach to project management can evolve and improve based on experience gained.
• Project teams may involve staff from partners as well as your own teams. Developing a common language and understanding of the approach to projects is important to minimise the risk of failures.
• How can you strike a balance between team size and autonomy versus the need to ensure the overall program is on track? Small teams with a well-formed objective can be very agile and adapt to change quickly. They need to be able to do so within a framework that will ensure their results are aligned to the overall program.
• The nature of this work can be very challenging for teams and individuals. This makes it a great opportunity to develop people in your organisation by providing them with stretching assignments and giving them support to develop their skills. You can use these projects as a way to develop high potential people in your organisation for future roles.
• How to find a balance for progress reporting and governance? Too much and it won’t get used, too little and teams and stakeholders will lose direction. It is vital to build a culture of transparency so that any issues can be spotted very early and success acknowledged as it is achieved. Steering groups have a key role to play in ensuring they guide, challenge and encourage teams while being ready to make tough calls when needed.

There are many other aspects to consider – the detail will be important, and it will depend on the context in which your projects are happening. We would love to talk to you about how you can prepare this aspect of your program.

We hope this series of blog posts on key aspects of global outsourcing have been helpful. If we can be of any further assistance, please contact us.