Outsourcing is the business practice of hiring people outside a company to perform services that

traditionally were performed within the company, by the business's own employees. Companies
typically do this to save money, since it is often less expensive to pay a third-party provider than
hire a full-time employee.

Outsourcing is also known as Business Process Outsourcing (BPO). This is the process of hiring
another individual or company, either domestically or internationally, to handle business
activities for you. It has become a common business practice that allows small and medium-sized
businesses to gain services and skills they would usually find hard to develop, because of either
financial or manpower restrictions, or possibly a combination of both. Meaning, you can grow
your business as and when you need to, without any major investment.

It also allows your business to focus on core competencies and, more importantly, cut costs and
improve efficiency, all very much hassle-free. As time has gone by over the last decade or so,
business owners now realize that there are many reasons that companies, both big and small,
outsource various jobs, but the most prominent advantage seems to be the fact that it saves
money.

Lower Costs is Where it All Begins!

Many of the individuals or companies that provide outsourcing services are able to do the work
for considerably less money, as they dont have to provide benefits to their workers, and have
fewer overhead expenses to worry about..

Outsourcing also allows companies to focus on other business issues while having the details
taken care of by outside experts. A perfect example would be knowing that telemarketing is the
best way to get the word out in regards to a new product or service youre launching (either
locally, nationally or internationally), but admitting that its not really your forte. You can hire an
outsourcing company that provides these services, whilst you concentrate on getting ready for
the influx of inquiries as a result of the campaign.

It also means that a large amount of resources and attention that might fall on the shoulders of
management professionals can be used for more important, broader issues within the company
which is always a good thing! The specialized company that handles the outsourced work is
often streamlined and will normally have world-class capabilities and access to new technology
that a growing company simply couldnt afford to invest in on their own. Plus, if a company is
looking to expand, outsourcing is a cost-effective way to start building foundations in other
countries, too.
Such tasks can be, but are not limited to roles such as accounting, bookkeeping, sales and
marketing, design and manufacturing, development, promotions, administrative and back office
assistance, customer service, web development and much more.

Different Outsourcing Categories

Nowadays, most freelancers or outsourcing providers will fall into one of the following
categories, in regards to the services that they provide their clients. Some will even offer several
of these:

Inbound Customer Service

Outbound Telemarketing
Web Design & Development
SEO and Online Marketing
Back Office / Admin Support
Virtual Assistant Services
Accounting and HR Management
Marketing & Sales Support

outsourcing will give away some of your business tasks that can easily be managed by
an independent entity, making life easier for business owners. And most of the time, as
well as being able to pass on these tasks to someone more experienced than yourself (or
your company), you will also save money, against hiring someone locally to do the same
job.

Just Start Now!

Regardless of what area of your business you might be thinking about outsourcing, the bottom
line here is that taking part in this extremely worthwhile activity will give you the opportunity
to expand your business at the same time as saving costs.

As someone who has been involved in the outsourcing industry in one way, shape or form for
close to a decade, Id be happy to answer any questions you might have on the subject
regardless of content. So, feel free to comment below, join me on Twitter or email me
directly if you would like to keep things a little more private. Cheers!

Before an organisation begins building an outsourcing framework it must first decide that
outsourcing is a viable alternative and that all other options have been thoroughly reviewed.
Outsourcing is complex, time-consuming, and at times even a career-killer. There is no single
approach to outsourcing that will guarantee success. Every situation is unique in one way or
 another. These unique elements are what keep clients, vendors and advisors up at night as no one
can see into the future and anticipate every potential outsourcing challenge.
The key to success is preparation and experience. Just as a sports team would not walk onto the
field of play without a meticulous playbook and a coach to lead them, nor should an organisation
that is contemplating outsourcing move out of ideation without an experienced outsourcing
advisor and a strategy to ensure success.
The first requirement in building a strategy for success is to develop a framework that will guide
the involved parties. This strategic framework for success must be based upon years of hands-on
experience to avoid the obvious and customary crises and pitfalls. Also, the framework must be
detailed enough to ensure stability and consistency yet flexible enough to be adaptable to the
uniqueness of each client/vendor situation.
Utilising the above high-level five-step continuum for the assessment, contracting,
transformation, transition, and management of the outsourcing process, provides that framework
ensuring that all major phases and processes are addressed, and identify any gaps or missing
processes that need to be included for proper planning of an outsourcing engagement.
Needs Assessment
First and foremost an organisation must understand why they want to outsource and what it is
they are trying to accomplish through outsourcing. Many organisations gloss over or skip this
step entirely believing that they already have most of this information and/or a mandate to move
forward with the project. That may very well be true but to skip this step of due diligence is
inviting disaster. Not only is it critical to understand where the organisation is today and where
the organisation is required to go in the future, but this is the time to begin tracking assumptions,
dependencies and risks associated with the project along with appropriate mitigation strategies.
Above all else, the senior leadership of the organization must be fully onboard with the effort. If
executed properly this step in the continuum may produce alternatives to outsourcing that are
more efficient and cost-effective. Key activities in this step include:
Define business needs and key objectives

Benchmark current processes

Understand standard activities and service level measurements (as-is)
Review future state service delivery options (to-be)
Assess the gaps between current and desired state
Assess feasibility of options & define strategy for service delivery alternatives (Insource,
nearshore, multi-shored delivery, combinations of, etc.)
Investigate implications of assessment
Validate associated costs and cost savings
Identify risks, assumptions, dependencies, & create mitigation plan
Business case development & sponsor alignment
Proposal & Contracting
 This step comes down to preparing to identify and select a vendor. A comprehensive and
meticulous Request for Proposal (RFP) and selection process will help to ensure that the
appropriate vendor is selected, rather than the well-known, flashy or cheapest. Take the time to
speak with numerous references with similar organisational requirements and dont be afraid to
ask tough and sometimes even uncomfortable questions. It is critical to know, if they are going to
be a strategic partner, that they are going to grow with you and they have the technology and
processes to support your current and future growth requirements. Also, the methodology for
transitioning the processes to the vendor must be reviewed in detail as this will be the first and
very stressful test of the client / vendor relationship. Remember that in this step of the
continuum, the framework for the duration of the relationship is going to be established and
long-term success or failure is rooted in the final documentation produced. Key activities in this
step include:
Review the business objectives & scope requirements
Review regulatory matters
RFI & RFP creation
Bidder meetings, vendor down selections, & vendor site visits
Identify vendors ability to provide required services
Solution preparation and discussions
Delivery centre planning & visits
Review transition strategy and deliverables
Vendor selection
Contract review and discussions
Master Service Agreements (MSA), Service Level Agreements (SLA), & Statement of Work
(SOW) evaluation
Assess governance requirements
Communications & Change Management
 Everyone agrees in theory that communications and change management are essential to project
success yet this is invariably the first item to be cut from the budget. This step is absolutely
critical to project success as it is how everyone will get on board with, and committed to, the
change. It is also the ultimate socialisation of why outsourcing is in the best interest of the
organisation and each and every individual impacted by the change. An amazing vendor
relationship, a fantastic price, the most successful transition of all time, and a value estimation
that is out of this world will still be recognised as a failure if there is a negative perception of the
project by the organisation. If performed effectively by experienced, competent professionals,
the management of the interpretation of the project will enhance the chances of success
exponentially.
Key activities in this step include:
Identify all impacted populations and stakeholders
Define transformation strategies & communications plans
Retained organisation design & retention planning
Establish the foundations for relationship management and change management
Strategy execution to ensure proper alignment throughout the organisation
Transition Management
The courtship has ended, the marriage has begun. Transition is the first time the client will begin
to seriously interact with the vendor outside of the sales process and as mentioned above, it is a
stressful interaction. Gone will be the team with flashy suits and bright smiles who promise the
world for a signature. In its place will be the team designated to implement those promises, the
folks who will roll up their sleeves and spend 14 hours a day doing what may at times be
considered impossible.
Both the client and the vendor will discover things that were completely unanticipated during the
Proposal & Contracting step and some of it may not be pleasant. Implementing and adhering to a
proven transition methodology is the key to success in this step. Many clients end up leaving the
transition leadership to the vendor and simply following their cue as they have the transition
project experience. Although the vendor has the experience as qualified by references in the
Proposal & Contracting step they very likely have their own best interest in mind. This is a
potential conflict of interest as contentious matters materialise such as change requests. It is
recommended that the client engage an impartial third party with extensive experience in
managing outsourcing transition to ride shotgun or in other words ensure that the vendor and
the client adhere to methodology, contract, governance, etc.
Key activities in this step include:
Transition governance implementation
 PMO & project support functions setup
Establish change control process
Create project plan, define deliverables, & milestones
Review interface design, data conversion,& testing strategy
Knowledge transfer strategy and training plan development
Define ongoing run governance and vendor relationship management
Execute transition exit strategy
Establish delivery centre operations process and procedures
Service Stabilisation & Run Operations
Vendor operations begin on the go-live date but post transition there will be issues, both
technical and business-related. The group best prepared to resolve these issues is the same group
that just completed the transition itself as they already have the governance and processes in
place. This stabilisation period varies in length by both the size of the project and the
preparedness of the operations team. Thoughtful discussion, turnover and sign-off of all
continued support processes and open issues will ensure a clean and successful handoff. The
metrics agreed upon in the Proposal & Contracting Step are now be monitored and now both the
client and the vendor are beginning to assess whether they are getting the return on investment
they were anticipating. Key activities in this step include:
Transition from implementation to run

Open transition issue resolution

Run governance implementation
Service delivery / SLA monitoring
Every outsourcing engagement is unique and the duration, cost and ultimate success will be
based on the scope of what is outsourced, process complexity, resources engaged, client / vendor
preparedness, user acceptance, due diligence, and many other factors that must be meticulously
indentified, monitored and controlled. There will be many bumps and roadblocks on the path and
although there is no single approach or methodology to outsourcing that will guarantee success,
serious preparation and deep experience coupled with a bit of bravery and a conviction to
succeed will enhance the chances of success. In the end reaping the benefits outlined by the
organisation in the business case created in the Needs Assessment step is the true gauge of
success.
System requirement document (SRD) defines system level functional and performance
requirements for a system. The SRD is derived from the concept of operations (CONOPS), system-
level performance metrics, mission threads/use cases, and usage environment and is developed, but
by the program office. It should include a system level description of all software elements required
by the preferred system concept. The SRD is developed during the Technology development (TD)
phase but as a draft SRD should be developed for the analysis of Alternative (AoA) in the materiel
solutions Analysis (MSA) phase. The SRD is used by the program office to provide more detailed
requirement than whats provided in a Capability Development Document (CDD) and should be
finalized prior to contract award.

The SRD should be developed with feedbacks and input from the industrial base. Once the SRD is
placed on contract, the contractor will further develop the specification and develop their own more
detailed requirement document; sometimes called a Weapons Systems Specifications (WSS).

The term System requirement document is a phrase commonly used to describe a software
performance specification. If your acquisition is exclusively for software you may call yours System
Performance Specification or System Requirement Document.