We foresee a rise in BPO in the year ahead, due to the cutbacks in US business operations. The credit crisis will drag on and weigh on profits. Business owners will be forced to cut back and lay off workers.
GO Global has a BPO center in Guatemala, an outsourcing destination that is becoming recognized, as India becomes more expensive to work. Our goal is to help small and medium-sized companies reduce costs and streamline organization.
Accounting and data entry are reasonably simple to outsource and through our Panoply Pro system, we implement the shift within three months.
We wish everyone a Happy and Prosperous New Year. May 2008 bring peace and good health for all the good people in the world.
Monday, December 31, 2007
Friday, December 14, 2007
Building Company Value through Outsourcing
Outsourcing certain business functions is a way to reduce overhead by shifting work to a lower cost location. Beyond the significant cost savings that outsourcing brings, the CEO is relieved of some of the burdens of operating the business, which often means concentrating on administering and managing employees. With newly available capital from the cost savings and freed up time, the CEO can focus on expanding the core business. For that reason, outsourcing has become more about unleashing the potential of your business and creating value.
When we talk about value, what does that mean? Although it is subjective and means something different in every situation, value usually has to do with improvement. For example, a house that is not properly maintained and periodically upgraded will lose some of its value. Conversely, fresh paint and upgrades, such as a new kitchen or bathroom, will add value and increase the worth of the house. In a similar way, businesses are worth more when processes are improved and business expands.
Outsourcing, when successfully implemented, can result in the following improvements:
• Error reductions
• Attenuation of staffing problems
• Better flow of information
• Innovation and inventiveness
• Better concentration on process
• Freeing up employees for higher-value activities (such as R&D and marketing)
• Steady growth in earnings
• Increased profitability
Outsourcing any process to a service provider, however, takes some doing. Just as in the case of a kitchen renovation, the owner and contractor have to work together to achieve the desired effect. Success requires discussions and decision-making, and taking action together to make the right changes.
A best practice to ensure productive communication is to create mechanisms to facilitate an open exchange of information and constructive feedback. This may be in the form of weekly meetings, conference calls, or detailed emails. There should also be measurement tools that record the process and differences in perception. For a successful outcome, all parties involved must commit to certain best practices and measures that will prevent failure.
5 Common Pitfalls and Preventive Measures
Pitfall #1: Lack of a partnership approach.
In a 2004 study by OutsourcingCenter on the predictors for outsourcing success, a trusted partnership approach was the greatest predictor of success. A collaborative environment that includes mutual trust and respect is essential to achieving the overall strategic objectives.
Preventive measures for this pitfall start with a well-defined contract that pinpoints each aspect of the relationship. While strong open relationships are essential, the relationship must also be contractual, so everyone understands from bottom to top that there is a serious commitment to the outsourcing process.
Without a partnership approach and contract, the relationship will be more like an ordinary customer-vendor arrangement, in which the customer wants the best deal at the lowest cost and the vendor tries to get the most money. Under a partnership arrangement, both parties look out for each other's best interests and are motivated to perform beyond the scope of the contract.
Pitfall #2. Lack of Cultural Commitment.
Outsourcing must be a strategic commitment that comes from the top. Without cultural acceptance and buy-in of the outsourcing program, resistance will prevail and hinder the arrangement. Employees will hope that the outsourcing arrangement is a passing phase or an experiment not to be taken seriously.
The preventive measure for this pitfall begins with establishing a champion of the outsourcing program. The initiative must be formally announced to employees conveying the importance of the program and the gains to be achieved. The leaders must be able to convey the program in a positive light with the message that everyone will benefit through participation and cooperation. In other words, they are expected to get on the bandwagon. A best practice is to let employees know that they will be measured by the extent of their participation, and that it will be reflected in their compensation. Without such a dictum, many employees will resist change by being resentful and disruptive.
Pitfall #3. Lack of Effective Change Management in the Client Organization.
Linked to the commitment to the outsourcing initiative is the deployment of change management strategies. This is by far the biggest challenge to outsourcing success. Both provider and client must be able to adapt the environment to embrace continual implementation of best practices and innovative solutions. Effective change management requires a commitment to new processes and procedures and continuous improvement. Any lack of innovation or competitive edge could risk the optimization of value that can be achieved over time.
Pitfall #4. Lack of Effective Communication.
Miscommunications and/or the inability to communicate the processes can foil the outsourcing relationship and process. Preventive measures begin with open and honest communication at the outset as to the parties' mutual expectations. A best practice is to clearly define what "success" and "value" will be the outcome of the relationship and how they will be measured. The presence of effective communications also means that everyone is "in the loop" and there is a proactive sharing of information, which is crucial to establishing an atmosphere of flexibility and cooperation.
Pitfall #5. Client's Lack of Knowledge of its Processes.
Often a client organization does not have sufficient knowledge of its own processes. Before the client can undertake a smooth transition to outsourcing, the organization must review and understand the processes it wants to outsource. Without that knowledge, the expectations cannot be clearly articulated or contractually formalized.
First, the client and the provider must create a flow chart of the specific business processes, which may include such factors as inputs and outputs, interactions with customers, cycle times, and common errors. Second, the client organization must prevent micro-management of the provider. Bear in mind that one of the chief objectives of outsourcing is to bring renewed energies to developing core competencies, and that any micro-management of the outsourcer virtually defeats this primary purpose.
The client has to let go and acknowledge the provider as the process expert and let the provider do what it does best -- process improvement. By allowing this to happen, the parties will be able to institute the methodologies, tools, frameworks, flexibility, and mentalities that enable a partnership approach and the commitment to achieve real value.
Outsourcing certain business functions is a way to reduce overhead by shifting work to a lower cost location. Beyond the significant cost savings that outsourcing brings, the CEO is relieved of some of the burdens of operating the business, which often means concentrating on administering and managing employees. With newly available capital from the cost savings and freed up time, the CEO can focus on expanding the core business. For that reason, outsourcing has become more about unleashing the potential of your business and creating value.
When we talk about value, what does that mean? Although it is subjective and means something different in every situation, value usually has to do with improvement. For example, a house that is not properly maintained and periodically upgraded will lose some of its value. Conversely, fresh paint and upgrades, such as a new kitchen or bathroom, will add value and increase the worth of the house. In a similar way, businesses are worth more when processes are improved and business expands.
Outsourcing, when successfully implemented, can result in the following improvements:
• Error reductions
• Attenuation of staffing problems
• Better flow of information
• Innovation and inventiveness
• Better concentration on process
• Freeing up employees for higher-value activities (such as R&D and marketing)
• Steady growth in earnings
• Increased profitability
Outsourcing any process to a service provider, however, takes some doing. Just as in the case of a kitchen renovation, the owner and contractor have to work together to achieve the desired effect. Success requires discussions and decision-making, and taking action together to make the right changes.
A best practice to ensure productive communication is to create mechanisms to facilitate an open exchange of information and constructive feedback. This may be in the form of weekly meetings, conference calls, or detailed emails. There should also be measurement tools that record the process and differences in perception. For a successful outcome, all parties involved must commit to certain best practices and measures that will prevent failure.
5 Common Pitfalls and Preventive Measures
Pitfall #1: Lack of a partnership approach.
In a 2004 study by OutsourcingCenter on the predictors for outsourcing success, a trusted partnership approach was the greatest predictor of success. A collaborative environment that includes mutual trust and respect is essential to achieving the overall strategic objectives.
Preventive measures for this pitfall start with a well-defined contract that pinpoints each aspect of the relationship. While strong open relationships are essential, the relationship must also be contractual, so everyone understands from bottom to top that there is a serious commitment to the outsourcing process.
Without a partnership approach and contract, the relationship will be more like an ordinary customer-vendor arrangement, in which the customer wants the best deal at the lowest cost and the vendor tries to get the most money. Under a partnership arrangement, both parties look out for each other's best interests and are motivated to perform beyond the scope of the contract.
Pitfall #2. Lack of Cultural Commitment.
Outsourcing must be a strategic commitment that comes from the top. Without cultural acceptance and buy-in of the outsourcing program, resistance will prevail and hinder the arrangement. Employees will hope that the outsourcing arrangement is a passing phase or an experiment not to be taken seriously.
The preventive measure for this pitfall begins with establishing a champion of the outsourcing program. The initiative must be formally announced to employees conveying the importance of the program and the gains to be achieved. The leaders must be able to convey the program in a positive light with the message that everyone will benefit through participation and cooperation. In other words, they are expected to get on the bandwagon. A best practice is to let employees know that they will be measured by the extent of their participation, and that it will be reflected in their compensation. Without such a dictum, many employees will resist change by being resentful and disruptive.
Pitfall #3. Lack of Effective Change Management in the Client Organization.
Linked to the commitment to the outsourcing initiative is the deployment of change management strategies. This is by far the biggest challenge to outsourcing success. Both provider and client must be able to adapt the environment to embrace continual implementation of best practices and innovative solutions. Effective change management requires a commitment to new processes and procedures and continuous improvement. Any lack of innovation or competitive edge could risk the optimization of value that can be achieved over time.
Pitfall #4. Lack of Effective Communication.
Miscommunications and/or the inability to communicate the processes can foil the outsourcing relationship and process. Preventive measures begin with open and honest communication at the outset as to the parties' mutual expectations. A best practice is to clearly define what "success" and "value" will be the outcome of the relationship and how they will be measured. The presence of effective communications also means that everyone is "in the loop" and there is a proactive sharing of information, which is crucial to establishing an atmosphere of flexibility and cooperation.
Pitfall #5. Client's Lack of Knowledge of its Processes.
Often a client organization does not have sufficient knowledge of its own processes. Before the client can undertake a smooth transition to outsourcing, the organization must review and understand the processes it wants to outsource. Without that knowledge, the expectations cannot be clearly articulated or contractually formalized.
First, the client and the provider must create a flow chart of the specific business processes, which may include such factors as inputs and outputs, interactions with customers, cycle times, and common errors. Second, the client organization must prevent micro-management of the provider. Bear in mind that one of the chief objectives of outsourcing is to bring renewed energies to developing core competencies, and that any micro-management of the outsourcer virtually defeats this primary purpose.
The client has to let go and acknowledge the provider as the process expert and let the provider do what it does best -- process improvement. By allowing this to happen, the parties will be able to institute the methodologies, tools, frameworks, flexibility, and mentalities that enable a partnership approach and the commitment to achieve real value.
Thursday, November 29, 2007
Smaller Companies Profit from Outsourcing
While business process outsourcing (BPO) has become commonplace among large corporations, an increasing number of small and medium-sized companies are appreciating the benefits of contracting out routine office functions. One good place to start outsourcing is the accounting function.
Accounting data is easy to transfer and does not require complex interpretation, so outsourcing this essential business function offers attractive returns on low levels of risk. Small business owners who are serious about protecting and exceeding their profit margins are outsourcing to reduce in-house operation costs.
A decade ago, the rationale for BPO was strongly related to reduction in labor costs, but giant companies, such as GE, Microsoft, and Dell, demonstrated that there are wider benefits to be obtained. Today, CEOs are looking for improvements in processes and efficiencies, and topping the list of reasons is a gain in profitability.
If American businesses, small or large, do not achieve profitability, they will fail. A strong accounting system helps identify where the best pockets of profitability lie, so they can crack the code of the business game.
GO Global offers a complete range of accounting services for small and mid-sized companies. We are based in the U.S. and have a highly trained staff in Guatemala where we do the day-to-day data processing and accounting functions. Legal and accounting professionals in the U.S. review the information before and after it is processed. We help our clients identify information that will enable them to grow and become more valuable to their shareholders and stakeholders.
Visit GO Global at www.goglobalbpo.com or call 877-462-7680.
Accounting data is easy to transfer and does not require complex interpretation, so outsourcing this essential business function offers attractive returns on low levels of risk. Small business owners who are serious about protecting and exceeding their profit margins are outsourcing to reduce in-house operation costs.
A decade ago, the rationale for BPO was strongly related to reduction in labor costs, but giant companies, such as GE, Microsoft, and Dell, demonstrated that there are wider benefits to be obtained. Today, CEOs are looking for improvements in processes and efficiencies, and topping the list of reasons is a gain in profitability.
If American businesses, small or large, do not achieve profitability, they will fail. A strong accounting system helps identify where the best pockets of profitability lie, so they can crack the code of the business game.
GO Global offers a complete range of accounting services for small and mid-sized companies. We are based in the U.S. and have a highly trained staff in Guatemala where we do the day-to-day data processing and accounting functions. Legal and accounting professionals in the U.S. review the information before and after it is processed. We help our clients identify information that will enable them to grow and become more valuable to their shareholders and stakeholders.
Visit GO Global at www.goglobalbpo.com or call 877-462-7680.
Monday, October 8, 2007
To Outsource or Not to Outsource: That is the Question
Key Issues to Consider in any Strategic Decision to Outsource
1. Outsource business functions that do not have to be done internally so you can focus on your core competency and grow your business.
2. Outsource specialized skills, such as accounting or graphic design, that are necessary, but not core to your business; however, where you need technically skilled workers that cost a lot in the U.S.
3. Outsource rote tasks, such as data entry, that can be done by trained personnel more efficiently and more economically outside the U.S.
4. Outsource finance and accounting to a specialist in those areas. Many times a business can not find competently trained people in their geographic area to perform these functions, but other countries have many competently trained employees with those particular skill sets.
5. Outsource a portion of a certain function as a backup system and to spread risk.
6. Communicate regularly with your outsource provider.
7. Make sure that your outsource provider has security in place and backup systems.
8. Negotiate and select the right outsourcing model to achieve your business objectives. Not all outsourcing is the same! Not all models will achieve the intended results. Use a consultant to assist you if you are not sure!
1. Outsource business functions that do not have to be done internally so you can focus on your core competency and grow your business.
2. Outsource specialized skills, such as accounting or graphic design, that are necessary, but not core to your business; however, where you need technically skilled workers that cost a lot in the U.S.
3. Outsource rote tasks, such as data entry, that can be done by trained personnel more efficiently and more economically outside the U.S.
4. Outsource finance and accounting to a specialist in those areas. Many times a business can not find competently trained people in their geographic area to perform these functions, but other countries have many competently trained employees with those particular skill sets.
5. Outsource a portion of a certain function as a backup system and to spread risk.
6. Communicate regularly with your outsource provider.
7. Make sure that your outsource provider has security in place and backup systems.
8. Negotiate and select the right outsourcing model to achieve your business objectives. Not all outsourcing is the same! Not all models will achieve the intended results. Use a consultant to assist you if you are not sure!
Thursday, September 20, 2007
Data processing and data entry
Many companies outsource data entry and data processing, certainly to lower costs and to free up time for more core business activities that generate revenue. We are finding, however, that many of our customers will show inaccurate data entries on their books. Over time, errors and inaccuracies can erode financial statements and reduce the value of the company.
If at some time in the future you want to sell your company or need investors, you most certainly want to be able to present sound and solid income statements and balance sheets that reflect the true worth of your business.
In searching for an outsourcing provider, bear in mind that you want references and experience in this area. Find out where the data entry takes place and ask: Do you have professionals overseeing the data entry workers? Can I call these professionals if I want to check up on the entries? Does the data entry provider have a U.S. presence?
Outsourcing data entry is less difficult than most other business processes, but it is a crucial part of the accounting/bookkeeping puzzle, which directly affects the value of your company.
If at some time in the future you want to sell your company or need investors, you most certainly want to be able to present sound and solid income statements and balance sheets that reflect the true worth of your business.
In searching for an outsourcing provider, bear in mind that you want references and experience in this area. Find out where the data entry takes place and ask: Do you have professionals overseeing the data entry workers? Can I call these professionals if I want to check up on the entries? Does the data entry provider have a U.S. presence?
Outsourcing data entry is less difficult than most other business processes, but it is a crucial part of the accounting/bookkeeping puzzle, which directly affects the value of your company.
Thursday, March 22, 2007
Inside the Outsourcing Industry
Cheryl and I attended the International Association of Outsourcing Professionals conference in Las Vegas. Cheryl is the CEO of Global Outsourcing, Inc., which is a new company providing financial services to mid-sized growth companies.
When we arrived in the gambling capital of the USA, we realized the conference was 30 miles outside the city at Loew's in Henderson. We stayed one night at the Venetian Hotel and took in the Blue Man Group, a startling piece of oddball entertainment. Believe it or not, we did not play one slot machine. Neither of us are gamblers. We like a sure thing and the outsourcing business is that. It's growing and moving into every aspect of business.
It was Cheryl's idea to start Global Outsourcing to provide finance and accounting services to mid-sized companies that want to free themselves from these tedious tasks. Cheryl is an attorney and CPA and is constantly on the outlook for opportunities and trends. While outsourcing has been around forever, it is taking new shape.
We learned a lot at the conference which was attended by representatives from major corporations, all of which outsource some of their departments, such as payroll and IT. One of the things we learned was that our name is too generic, as Global Outsourcing is the name of the industry itself. We have since decided to use our tagline as our name: GO Global, which has been trademarked by our company.
Company names, as are website domain names, are tough to come by these days. There's almost no name--Greek, Latin, French--that hasn't been taken. For days, I walked around with names swirling in my head -- eVolve, Ascend, Panoply, Rhionne -- and all were taken. I realize now why people use their children's names or initials or a combination thereof to name their businesses. Finally, we decided to stay with GO Global because prospective clients need to understand right away what our business is about; otherwise we will lose their attention.
We decided to name our roster of services Panopy Pro, so when we create brochures and marketing pieces, we can apply this name as a way of labeling or remembering our program and make it stand out. In marketing, it's all about presentation, use of words and design, and repetition to create recognition and brand appeal.
I will tell you more later about the evolution of GO Global. It is going to be an exciting adventure. Just one more thing. We are opening our first business process outsourcing (BPO) in Guatemala. It is so close to Miami and beginning to emerge the way Costa Rica and Panama have. Central America is the next frontier for outsourcing.
When we arrived in the gambling capital of the USA, we realized the conference was 30 miles outside the city at Loew's in Henderson. We stayed one night at the Venetian Hotel and took in the Blue Man Group, a startling piece of oddball entertainment. Believe it or not, we did not play one slot machine. Neither of us are gamblers. We like a sure thing and the outsourcing business is that. It's growing and moving into every aspect of business.
It was Cheryl's idea to start Global Outsourcing to provide finance and accounting services to mid-sized companies that want to free themselves from these tedious tasks. Cheryl is an attorney and CPA and is constantly on the outlook for opportunities and trends. While outsourcing has been around forever, it is taking new shape.
We learned a lot at the conference which was attended by representatives from major corporations, all of which outsource some of their departments, such as payroll and IT. One of the things we learned was that our name is too generic, as Global Outsourcing is the name of the industry itself. We have since decided to use our tagline as our name: GO Global, which has been trademarked by our company.
Company names, as are website domain names, are tough to come by these days. There's almost no name--Greek, Latin, French--that hasn't been taken. For days, I walked around with names swirling in my head -- eVolve, Ascend, Panoply, Rhionne -- and all were taken. I realize now why people use their children's names or initials or a combination thereof to name their businesses. Finally, we decided to stay with GO Global because prospective clients need to understand right away what our business is about; otherwise we will lose their attention.
We decided to name our roster of services Panopy Pro, so when we create brochures and marketing pieces, we can apply this name as a way of labeling or remembering our program and make it stand out. In marketing, it's all about presentation, use of words and design, and repetition to create recognition and brand appeal.
I will tell you more later about the evolution of GO Global. It is going to be an exciting adventure. Just one more thing. We are opening our first business process outsourcing (BPO) in Guatemala. It is so close to Miami and beginning to emerge the way Costa Rica and Panama have. Central America is the next frontier for outsourcing.
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