Malaysia: Perfect Place for Brainiest in Outsourcing

Malaysia: Perfect Place for Brainiest in Outsourcing

Outsourcing basics

Globalization is at the forefront of many newly created best practices. As service providers apply their existing standard best practices to larger, international contract scope, they find that managing the projects requires new techniques, procedures, and activities devised for specific regions. Outsourcing is a process of transferring responsibility for a specific business function from an employee group to a non-employee group. Outsourcing service is recognized as an effective management tool. Companies often incorporate outsourcing as a strategy in business planning. Companies can provide better client service, produce a better product, get jobs done efficiently by outsourcing their non-core business functions. Outsourcing is an increasingly important initiative being pursued by organizations to improve efficiency according to research by Vining and Globerman in 1999. "To be able to survive and be profitable in current globalization era, companies tend to use outsourcing in larger extent" concurs Brannemo in 2006.

Outsourced functions

In today's business environment, companies considered outsourcing to empower business focus, mitigate risks, build sustainable competitive advantage and extend technical capabilities and free resources for core business purposes. Some companies outsource their core activities on the value chain extensively and other companies in contrast are extensively outsourcing their secondary activities of their value chains such as information technology, accounting systems and distribution. Human Resource functions as well as Finance and Auditing is also included in the list these days. What involves very high-level strategic decision answering the question 'what to make and what to buy' have weaved itself some implications right from strategy to day-to-day management and performance tasks. Therefore, companies must outsource intelligently. Outsourcing decisions may affect company's cost structures, long-term competitive situation and can also alter the nature of risks that the company must manage. Hence, it is crucial for company to understand and have a clear conceptual framework of the outsourcing decision. Furthermore, company must also know the benefits and risks of outsourcing. Although what started out in the manufacturing (mass production/ outsourced for resources locality) industries to IT (high technology outsourcing for technical expertise) have now incorporated services as well such as HR and Finance apart from IT services.

Common Best Practices in Outsourcing

Best practices have always been experimented with to create great customer experience. There are companies that have experimented with modifying its existing transition-phase best practices for a customer with locations in more countries, this company now exploits its global management governance model as the best-practice blueprint for other similar customers. Many outsourcing companies seek to set up operations where the costs remain low and there should be modern infrastructure with a conducive business environment and high levels of global integration to remain attractive towards their customers. Of course companies that employ outsourcing partners have to also deal with control over managing the partnership and handling staff transition and morale among others.

Innovative Best Practices in Outsourcing

One of the many best practices that are transforming the business world is the outsourcing of the cerebral function - decision making, as third-party provides structured decision alternatives, analyze data, and recommend or even take courses of action to approve as simple as credit facilities and marketing investments and procurement. Are businesses really ready to outsource their thinking? This depends on confidence in analytics generally, since third-party decision making is based on analytics-intensive task. Major outsourcing partners are helping retailers to decide where to build new stores, large auto insurance companies where to set rates for different customer subsets, pharmaceutical giants to decide how to deploy their sales people, and leading office products retailers to decide which promotions and products to offer to which customers. Companies that outsource decision making report improvements in their decision processes and results. But how did they get comfortable with the idea of turning important business decisions over to third parties? Most say "Smaller Budgets Larger Profits". Work that can be completed by 4 people who are seated in various locations can complete a massive project on time and within budgets as opposed to running a complete operations infrastructure. Some vendor's teams have deep domain expertise as opposed to hiring them which would cost a lot for the company. Therefore project to project based management seems to work well for organizations that prefer to get get more done within limited available resources. Thinking of the concept we can draw similarities to specialization of work during the industrialization era. Only difference here is the locality or the expertise and the convergence is made possible by technology.

Creative way for Malaysia to become an Outsourcing Hub

According to the Kearney's Offshore Location Attractiveness Index in 2009, Malaysia was ranked third most attractive shared sources and outsourcing (SSO) location. Malaysia offers low cost of labor and taxes, and good infrastructure for offshore centre to companies who are looking to set up shared services centre or to outsourcing their services in Asia. In order to sustain Malaysia's growth in this field, Malaysian businesses should leverage from these outsourcing companies best practices