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7 Outsourcing Tips for This Recession |
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| The financial crisis has placed sudden and severe cost pressure on many internet retailers. Outsourcing of non-core processes can reduce costs by up to 50% while creating operational flexibility for retailers to weather uncertain times and quickly scale up if needed. |
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| Outsourcing has evolved significantly since the last recession. Whether you’re new to outsourcing or a seasoned expert, these challenging times require taking a new look at this important strategy. |
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Here are our outsourcing tips to help you during this recession:
- Don’t play the waiting game - It takes time to determine which processes to outsource and find the right service provider – most companies take several months. Starting this process sooner rather than later will ensure you have the time to make the right decisions. Amid these turbulent times, many retailers are in a “waiting” period, uncertain of how and when to act. By acting today, you will be better positioned than your competitors to weather the storm.
- Push the outsourcing frontier - For internet retailers, outsourcing is no longer just about basic customer support. Credit card fraud prevention, complex customer care, user-generated content moderation, and social media monitoring are now all processes that can be effectively outsourced. To tackle these more complex processes, you need to find the right partner – one with the strategic insight to help you identify the best outsourcing opportunities for your business and flexibly design a program to meet your specific needs. You also need a partner with the staff and resources to deliver higher-end, knowledge-based services.
- Avoid heavy upfront investments – One reason many outsourcing programs take a long time to get up and running is that the provider requires use of its own software systems – this increases the upfront investment required, both in terms of time and money. This doesn’t have to be the case. A flexible provider will work with their clients’ in-house systems – which saves you time and money and avoids migration risk.
- Explore creative pricing models – Gone are the days of pure hourly or volume-based pricing. These pricing models don’t necessarily create aligned incentives between client and provider. Today, many providers are willing to incorporate risk-sharing and gain-sharing into their contracts. This incentivizes the provider to not only meet SLAs but also to achieve meaningful, ongoing performance improvements that benefit the client.
- Choose a provider with a strongly results-oriented culture - Understanding a provider’s work culture is a critical, and often overlooked, selection criterion. A results-oriented work culture drives performance and increases retention of the most skilled agents. Hallmarks of a results-oriented culture include a deep focus on metrics such as customer satisfaction and productivity, rigorous performance management, regular recognition and celebration of results, and robust QA processes. During provider selection, you should interview employees to understand why they chose their employer and what motivates them.
- Choose a provider with a strong track record of achieving process improvements - Especially for knowledge-intensive processes, it’s important to work with a provider that has a proven track record of achieving ongoing process improvements. This can ensure that you realize the immediate cost savings associated with outsourcing as well as ongoing benefits due to greater productivity and improved quality. Many providers will claim that their ability to achieve process improvements is one of their competitive differentiators. To validate these claims, you should gather specific examples that clearly tie to bottom line benefits for the client.
- Make sure your provider has the highest standards of data protection and security - Fraudulent activity increases during recessions – it will become harder than ever to protect your customers’ information. Therefore, data protection and security is even more important than before. The gold standard certification for this critical area is ISO 27001:2005 – make sure your provider has this.
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| Outsourcing presents both opportunities and challenges. An effective outsourcing program will reduce your costs and enable you to focus on your core business strategies – leaving the rest to a trusted provider. |
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About Motif |
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| Motif is a global services firm that specializes in working with internet retailers to design and implement outsourcing programs that support their strategic goals. We focus on knowledge-intensive processes such as customer experience, credit card fraud prevention, and online user-generated content moderation. We combine a uniquely flexible client partnership approach with world-class talent management processes to generate “above and beyond” results for each and every client. Our internet retail clients include one of the top 4 online travel agencies and one of the largest online auction sites. Our leadership team has significant operations experience in internet retail. Karl Wiley, President, spent over 6.5 years at eBay in a variety of senior operational roles. Bob Kaplan, CEO, in addition to many years as a partner at McKinsey & Co., spent several years at Alibris, an online used books, video, and music retailer. Motif was founded in 2000 and has never lost a client due to performance. |
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| To learn more about Motif, please click here. |
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Copyright © 2006
Motif, Inc. |
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