The Pros And Cons Of Outsourcing Relationship

2552 Words 11 Pages
“By the third year of a long-term outsourcing relationship, significant tensions often exist between clients and outsourcing vendors. Much of this tension,” he explains, “can logically be attributed to changes in personnel, technological advances, an evolving external business environment, and shifts in strategic direction for one or both firms.” Also, factors such as changes in the cost of resources due to currency fluctuations impacted by the financial markets and the national economy could contribute as well to increasing tensions between the two sides of an outsourcing relationship. Therefore, baselining is a critical aspect.
The benefits of baselining accrues to both sides of the business relationship as risks that threaten the relationship
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This simply gives the company conducting the due diligence the front seat in checking facts from a first person point of view.
The benefits for a due diligence goes two ways as it also serves the provider just as much as it serves the company outsourcing the process. It creates an opportunity for the provider to validate its competence for being able to execute the task at the quoted cost.
Due diligence also helps to ascertain the level of compatibility between the organisational structure of the two parties engaged in the outsourcing arrangement and their mode of operation so that it can be used as a yardstick for performance assessment as well as for process transfer.
The due diligence procedure enables the BPO service operators to provide an assurance regarding their competence and service levels documented in the request for proposal. BPO operators also help to ascertain the depth of knowledge availability so that the outsourcing plan in place for the acquisition as well as training can be integrated and included in the transition

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