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Business Plan For Outsourcing PDF
Business Plan For Outsourcing PDF
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Business Plan
InstaPhone (Pvt.) Ltd.
InstaPhone (Pvt.) Ltd.
89-I, Jail Road
Lahore, Pakistan
Submitted By:
I. Table of Contents
I.Table of Contents............................................................................................................3
III.Operational Plan..........................................................................................................9
V.Cost Analysis................................................................................................................17
VI.The infrastructure......................................................................................................21
VII.Commercial Strategy...............................................................................................23
VIII.Case study................................................................................................................25
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These elements serve the core role in increasing the importance of business
process outsourcing because it also helps companies to focus on core areas.
Companies generally outsource processes to reallocate accountability and
control costs. Thus the management is in a better position to focus on core
areas, and not keep itself engrossed in other areas. Outsourcing also helps
companies to avoid capital expenditures (future investments), which is in
particular important in non-core areas that may need new systems and up
gradation. By and large, companies only want to spend money on core areas.
For the big picture, in call center environment, specifically Instaphone Pvt.
Ltd., following things can be considered on Ops side:
On-time Environment
Concurrency
Reliability
Reactiveness
Distributed Environment
1
http://www.indobase.com/bpo/bpo-benefits/index.html
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Performance analysis
Accounts
Field expertise
The elements are much alike yet they provide the executives with a lot of
time to focus on new grounds for the organization to generate more and
valuable revenue.
Outsourcing may also result into the possible loss of flexibility in reacting
to changing business conditions, lack of internal and external customer
focus and sharing cost savings. Loss of internally generated talent is yet
another problem associated with the outsourcing as it may hamper the
growth of an employee by depriving him from the experience he would
have gained by handling the business issue himself then by passing it
over to some other external party.2
All in all, following are the risk factors involved in outsourcing business
process.
Outsourcing cost
Time factor
Administrative control
With all these pros and cons in observation, outsourcing can still not be
neglected as a force for the good of the organization. These may seem to
be a threat to the organization but it can also be converted into
opportunities and strengths.
2
http://www.softwareprojects.org/disadvantages-outsourcing.htm
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For the best outsourcing outcome the BDO must come up with the prospects
its respective organization is looking for. The BPO will not be able to
determine the targets and scope of work at hand until and unless they are
communicated the main stream targets that an organization is considering.
Following are the credentials that a BDO must come up with in order to
present the mission of achieving its targets with the targeted BPO.
• A scope of work
• Level of effort projections
• Time frames
• Performance indicators that will be used to monitor the
project.
Failed customer services projects are often the result of specifications being
neglected before full business process outsourcing of customer services
project is undertaken.
change control prevents a project from growing out of control and exceeding
its budget and time frames.
For the first step, standard operating procedures are a must to be developed
to guide its in-house administrative call center employees.
When doing outsourcing, recognize that your BPO facility and its staff might
not have much subject matter expertise or familiarity with how your
individual business works. Organization will need to establish a mentoring
relationship with the BPO. Organization must not let this relationship become
acrimonious, since it is to be expected that offshore staff will need time to
become proficient in their client's operations.
Many BPOs have hot-call transferring capabilities, whereby calls that cannot
be resolved with BPO service can be transferred back to the client
organization.
Payment and invoicing for customer service programs can vary according to
the size of the service provider. Normally, most of the call centers
organizations work under advance payment arrangements, working with a
decided time frame advance payment.
At the mid-sized and smaller outsourced call centers, payment terms might
not require as much of an advance payment as the large outsourced centers
require. Billing is usually done weekly with payment due after one week.
Rates are based on production (login) time, defined as the time that a
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customer service agent actually spends logged into a phone system and
prepared to take calls. Each payroll hour generally provides between 42 and
45 minutes of production time at most call centers.
Mistakes To Avoid
To reduce risks from internal staff turnover, contract provisions can be used
to tie staff to specific projects. This is particularly important for supervisors
and team leaders, with whom clients often invest substantial training. It can
be specified that replacements for supervisors come from within the original
team that was trained by the organization.
Maintain Momentum
There are three things that are needed from a BPO to keep an outsourcing
arrangement dynamic and effective, particularly for customer service
programs:
With any outsourcing arrangement, you have less control than you would if
everything were housed within your organization and run by your employees.
In fact, the loss of control is one of the most frequently cited reasons not to
outsource, and, coupled with the flexibility of being able to change things
and make them exactly how you want them, is certainly a compelling
argument to keep technology and skills in-house.
For most contact centers, however, the biggest risk with "loss of control" isn't
actually in the functionality of the service. Many outsourcers can provide as
much flexibility as your own staff. In addition, the overhead and extra delay
involved in making changes can actually be a good thing. Take a look at an
area you are changing frequently -- routing, reporting, and recorded
announcements, whatever. Are you making changes in this area because you
need to, or because you can? Frequent changes and creeping complexity can
be detrimental; take this into account when discussing change management
with your outsourcing vendor.
The larger risk of "loss of control" actually has to do with service quality,
such as service performance, uptime, correctness, etc. You are dependent
upon your outsourcer to manage this well. Many times, an outsourcer can
provide superior service on these counts. The trouble happens when they
can't, or don't.
Technology Trend for the Call Center3) is one such an example. It is possible
to outsource the design, implementation, operations and management of
these applications entirely.
understand all the links in the chain and to be sure that each party in
the process has a view of the whole picture. Most providers want to
deliver great end-to-end service, but they often only control a piece of
the puzzle.
5. Start-up troubles. Starting a new service is complicated, and you
rarely know how well everything will work together until the service is
actually running. At this point, it is much harder to create a "lab" to do
a performance evaluation, and it is more important to undertake
effective testing across specific windows that are agreed upon with the
providers. There is no substitute for system testing and too many
deployments have suffered from "infant" mortality.
8. Start of day. Machines are supposed to work the same way all the
time, but we've all experienced issues that are based upon the time of
day. The most common of these are start-of-shift issues as new
grammars are cached or moved from one machine to another. Some
callers can hear very long delays of up to 30 seconds when this occurs,
and it's not something you can identify without testing this scenario in
advance.
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V. Cost Analysis
Cost Analysis
Start-up budget
Investments
The organization and its partners have several possible ways to contribute to
the capital : they may put money into the business thanks to personal loans,
microloans, aids and grants. These are contributions in cash. The
organization and its partners may also provide equipment: vehicles,
materials, furniture, premises, etc. These are contributions in kind.
Operating budget
The operating budget includes all recurring expenses, such as rent, salaries,
insurance and supplies. For instance we can take the example of a pilot
project of creating a recycling site, the scenario is different from that of the
call center industry but the example is to illustrate the start-up analysis of
the business. Henceforth, the budget can distributed as presented below.
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Running costs
Adding up all the employees’ monthly salaries is enough to know the global
amount of labor costs. The hardest task for the organization is to evaluate
the number of employees he needs, according to the production volume of
the company. For instance, the organization has to estimate the number of
computers a technician can dismantle in one hour. This ratio goes from 4
computers an hour to more than 20, if the technician is competent and is
used to working on the same type of equipment.
Treatment costs
Income
Chief Partner
As the executive director, the chief partner is the main manager of the
enterprise. He guarantees the smooth running of the company and is
responsible for its development and global strategy. He will have to prepare
the business plan, define the positioning on the market, create partnerships
and represent the enterprise. Therefore, he must be specially versatile and
master all management techniques extremely well, as well as the technical
aspects of his job. The organization will greatly benefit from being assisted
by a business manager and a supply manager to ensure the expansion of his
activity.
Technical staff
Team management
assigned tasks, some tips to perform them and a description of the tools to
be used.
Training
To motivate the team and improve productivity, the organization may resort
to the attribution of realistic work objectives and to the posting of results.
The enterprise can post the quantities of equipment treated and to be
treated weekly, monthly or quarterly.
The location
The choice of location of the recycling site must be one of the organization’s
main concerns. It should also be relatively close to urban and commercial
zones.
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The call centre must be divided into several areas, separating activities from
one another. The dimensions required for various areas may vary according
to the requirement and business activities.
Utilities
Electricity
The power cables coming from the electric meter must be of sufficient size to
support the total power of the workstations in test (power of the central
processing unit + power of the monitor) which are connected simultaneously
to the cable. There should be an upstream cutout or a circuit breaker for
each power cable in the electric meter. To ensure the safety of individuals, it
is preferable to have ground fault circuit interrupters. Each test bed should
be equipped with a 10 to 15 amp fuse. A professional call center must have
electrical emergency stop buttons at every workstation.
Telecommunications
Tools
Sanction Plans
The administrative body must prepare in detail the action plans he is going
to set up to achieve the goals set out in the business strategy. The next
phase consists in describing in practical terms the different stages and
means implemented to achieve these goals. For each step, the following
aspects are detailed and planned : actions, costs, timing and human
resources. These action plans should be aligned with the business and the
objectives set. Actions are prioritized according to needs. Depending on the
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Partnerships
With respect to the above mentioned details for setting up a BPO, we here have the
scenario of Insta (Pvt.) ltd, the case under observation will be as follows:
With the current setup in hand, there is availability of resources in Insta; there is a
running setup with a fair amount of inventory on hand that includes:
Premises with its basic requirement of seating arrangements, terminals to work on,
manpower availability to a certain level, administrative body managing the workforce
and miscellaneous obligatory elements to keep the system running smoothly.
With Insta moving into new market of providing BPO services to organizations and
searching for new clients, these available resources do prove to be viable for the
potentially growing Insta (Pvt.) ltd. BPO industry is still on its way to maturing in
Pakistan markets which makes it a good opportunity to step into. With its historical
background, the administrative body does have a relative experience of providing
services to its client. What should concern us are the SOPs (standard Operating
Procedures) that need to be developed within this firm before it steps into the business
flow. If we examine Insta’s situation more closely with reference to importance and
benefits of BPO, Insta can prove to be a perfect fit in this industry with its current
resources available at hand.
As for the operational feasibilities, again, developing SOPs will help it a lot in every
imaginable step, but it should also be noticed that these SOPs will vary from time to
time depending on the case. Administrative body should, tough, carry out the
formulation of its core strategies for success, scope of primary work, targets for future,
and strategies to maintain its momentum for success in the long run.
The next big thing to do while outsourcing is to manage your resources which include
managing workforce, managing available resources, managing communication
channels, and managing every core element in the work procedure (all these elements
had been discussed prior in this document).
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Lastly, not the least is the financial aspect, the biggest cost in the occurrence of a new
setup business is the initial inventory and premises cost. Fortunately for Insta, all
resources are already available to work with. But there is a cost that will occur and that
is the running cost of this business. These costs accumulate in the following fashion:
Apart from this, infrastructure may also need to be taken care of,
• Electricity
• Telecommunication
• Tools to carry out standard procedures
As mentioned all these aspects will vary from client to client, depending on the
requirements of business or its client.