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The success of the transition phase in an outsourcing arrangement can have a significant impact on the future success of the outsourcing relationship. It is surprising, due to its significance, that this area of the outsourcing relationship isn’t given greater attention. And in a lot of cases, it certainly receives a lot less attention than it deserves. A lot of times a BPO process is thrown over the fence and little thought is given as to how it will be handled. Needless to say this is not good!

More and more organisations are turning to outsourcing as a means to increase productivity, improve service delivery and general process improvement, rather than simply to reduce costs. According to research from the Outsourcing Institute, as the number and variety of outsourcing relationships being established is on the increase, greater focus is being given to the ‘transition phase’ of outsourcing projects.

In the beginning outsourcing was only viable to large organisations that were interested in moving the work of large teams (100 people or more) to an external provider to reduce costs. Due to advancements in technology and telecommunications infrastructure, access to shared data centres and cloud-based applications, smaller organisations can take advantage of outsourcing for initiatives that may affect as few as five people.

Regardless of the size of the organisation or the outsourcing project, all relationships must include a series of activities and tasks to migrate the work from the current environment to the future environment. According to Robert Moore, Vice President of Transition and Transformation at Sutherland Global Services, “In my experience, there seems to be no correlation between the size of an outsourcing effort and its associated complexity. As a result, the act of transitioning work takes on a role of ever-increasing importance.”

“Organsations considering outsourcing key aspects of their business would be wise to evaluate their partners on their ability to successfully transition work rather than simply evaluate them on what their steady state operations might look like,” says Moore.

A lot of things can potentially fall through the cracks and lead to disputes down the track if they are not properly documented and considered in the transisition process. The transition phase offers the opportunity to re-evaluate the people, processes and technologies that are currently being deployed, and build in improvements that align with the needs and objectives of the business. A lot of companies are training their people in Six Sigma principles with a view to improving process mapping and also as a way of leaving out redundant and unnecessary processes. It’s amazing how many companies have a hidden factory operating under their noses that a transition process will highlight and eliminate.

There are three vital areas that need to be considered when it comes to the transitioning phase of an outsourcing relationship: People, Processes and Technology.

Technology: The migration or replication of the required technical environment, which includes the set­up of all required software, hardware, and network access.

Process: Documenting the current processes and transferring this knowledge to the outsourced team members.

People: The human factor typically goes unaddressed and is allowed to evolve on its own, which is a common mistake. The management of the human factor is what dictates the relative success or failure of the transition phase.

While a transitional failure will not necessarily kill the outsourcing initiative, it will most certainly place the relationship on a difficult or adversarial footing, from which it may never fully recover. The company needs to work with the BPO supplier and make sure than it has its own people on the transition team and not leave everything up to the vendor. This will ensure that there are no surprises.