Factors Driving Changes Within My Professional Practice

Published Date: 02 Nov 2017

This article introduces the fundamental elements of change theory, and discusses the factors driving change within Business Management. This study explored the issue of the change implementation of outsourcing in business environment.

The pressures of globalization, regulation, and cost control have forced enterprises to broaden their outlook. The success of your business depends largely upon the decisions you make. A business plan allots collective assets and measures the outcomes of your actions, helping you set authentic and convincing goals and make decisions. The absence of planning leaves you poorly fitted out to anticipate future decisions and actions you must make or take to run your business successfully.

To ease those pressures, many enterprises have acted to improve their organizations’ skills and won’t hesitate to look outside for a third party to perform the functions that can’t be done as effectively in house.

My company’s strategic vision is to outsource some of the activities and are thinking beyond tactical price reductions and

looking at how they can use outsourcing to refocus internal staff on strategic activities.

Outsourcing is when a company contracts another to provide services. The controls are transferred to the contractor who takes responsibility for that part of the business. The key is not to tell how to do the work, but focuses on what the end results should be. While outsourcing is used as a tactic for reducing costs of simple back-room functions but my company planned to outsource more complex tasks of IT to get access to industry best practice and cutting edge technology. One of the main reasons for entering into an outsourcing agreement is to take full advantage of the provider company’s expertise in a particular area: outsourcing gives full rein to that expertise, with the provider being accountable for it. There are some basic principles to follow, and applying them from the outset will help you develop an effective, successful relationship with your service provider.

Since the business is growing and company is expanding rapidly outsourcing can bring great gains. The work done by the experts in terms of quality is not possible without hiring of senior executives. Since the company is looking at saving costs, it would not be able to employ full time senior staff for a fixed monthly cost.

The following three strategic benefits are expected from outsourcing activities:

• Improved visibility into spending

• Enhanced ability to accelerate company’s growth

• Refocusing of professionals on more strategic activities.

Key Driving Force for Change

Change is a complex process and business progress through multiple stages before real change occurs. A change is an event, action, or condition that affects the range, value, or duration of a project or task. Change management is the process of constituting, managing, instrumenting, and communicating changes. The change process begins with a vision for a better alternative. For each element of the vision, a set of preconditions begins to emerge or to develop strategies to implement change. Finally System mapping brings to consciousness to the change and strategy.

Outsourcing is an constituted way of doing business today, allowing companies to increase their budgets and resources — and generate good products.

Outsourcing can help the company to focus on its core business.

Using contractors for services that are not core to your business – such as IT, means you don’t need expertise in them. It can save time, money and effort.

Outsourcing hands responsibility to experts in the field. That should mean you get a higher quality service

It frees up the company’s skilled to concentrate on other important areas, giving them more job satisfaction

Outsourcing gives the company more flexibility.

As the onus lies with the contactor, it gives you better control.

Outsourcing can be more effective than the work carried out by company’s own staff as it can be enhanced by incentives, or even penalty clauses if needed .

Outsourcing gives you get better control of budgets, better control of delivery dates and lower costs due to economies of scale

Other benefits include: faster set-up of the function and fixed costs becoming variable costs.

The gains are not only financial. There are less quantifiable benefits, too. You are buying in industry best practice and leading edge skills.

Specific outsourced benefits include continuity and better security and risk management.

New ideas – innovations come with working with fresh, expert eyes from outsourced skilled staff.

Scope of Change

Successful change projects require a complete, convincing understanding of the forthcoming challenges, demands and complexities, followed by specific actions to address them. The act of fairly defining and scoping the change guarantees more authentic and hence more credible change management plans. The absence of early insight leads to a greater risk that complexity will be depreciated or even leave out. The change vision will help determine what is strategically most important to the company. Without a shared vision of the change, it will be more difficult to align day-to-day operations with the change goals.

Approach to Change - outsourcing a strategic value

Need to reduce operating costs,

Improve return-on-invested-capital,

New strategies and processes

Supporting solutions to efficiently deliver new products to market,

Make sure product quality and availability.

Implement a real-time performance tracking and management solution for key operational metrics

Enterprises need to change the focus to lowest total delivered cost

Intended outcomes of Change

Access to improved pricing

Reduce transaction processing costs and burdens

Re-fix attention on more strategic activities

Reduce process cycles

Reduce headcount

Access to supplier intelligence

Gain access to improved pricing

Gain access to expertise

Reduce IT systems costs and burdens

Increased global competition

Need to standardize procedures

Key areas of focus

Intense competition and price deflation will maintain pressure to reduce costs and improve business performance.

Effectively managing costs will require enterprises to continually enhance their operating models.

Outsourcing is already a component of many business operating models.

Enterprises outsourcing have recognized rapid and measurable reductions in their cost designs, highly improved spend acceleration and control, and operational efficiencies.

The outsourcing strategy applied and value returned are predicated on the maturity of the operating model.

Successful strategies: assess model maturity; use compelling business case to elicit executive and stakeholder support; evaluate providers on current and future needs;

Define clear metrics and incentives; dedicate governance to manage relationship.

Recent economic decline only reinforced the need for business ventures to control costs and increase performance.

As global markets begin to recover, increased competition and price depreciation will demand that enterprises keep a firm grip on costs.

Developing the competencies in-house can often be too costly or too time-consuming — or both.

Key challenges

Management believes it will lose control of quality and delivery reliability

Regular insight into expense, quality features, and delivery performance.

Outsourcing complicates rather than simplifies.

Streamlined strategy and processes

No financial justification for outsourcing

Assess the potential financial impact of outsourcing

Increased logistics costs

Required capabilities do not exist

Continuity & Risk Management (high risks of exposing confidential data)

Underestimation of running costs and Hidden costs

Lack of customer focus

Active communication and collaboration

Linguistic Issues related to variations, time frames and distribution of responsibilities

Analysis and impacts of change- An evidence based analysis

To ease these pressures and decide if outsourcing is the best path to take, an enterprise must first examine its own capabilities and ensure it has the right organizational structure

and processes in place. Only then can it decide whether investing in an outsourcing arrangement will deliver what it needs better and cheaper than if it were to keep the function in-house. No matter the enterprise’s position on outsourcing, the amount of spends is one of five critical strategies underlying transformation to enterprise value. It is critical that any enterprise looking to outsource a function or process place as much spend as possible in order to make the best informed decision on what may be a critical undertaking.

The bottom line on deciding whether to outsource is this:

It doesn’t matter how your organization is organized or how it processes its work. If your enterprise has a complete or close to complete picture of its operations and a strong handle on spend, it can make a more informed decision on whether outsourcing is the right way to go. Conversely, if you do not have good spend visibility, you may make a hasty decision either way, possibly leading to regret ─ and lost opportunities.

Reasons Enterprises Will Not Outsource

Perceived loss of control - Low tolerance of change :Sense of insecurity

Fees for outsourcing services too costly - Economic implications

Company strategy: Build capability in-house

Fee structure for outsourcing services unclear

Inability to measure savings, improvement opportunities

Unable to build compelling business case - Disagreement over the need for change. People are the key factor in overcoming resistance to change

Already invested in applications/systems

Fear of the unknown

Recommendations for the Change

The successful implementation of new working methods and practices or integrating new businesses is dependent upon the effective co-operation of employees and management. The important part of successful change is, therefore, constructing and communicating the reasons and the vision for change. 

More rigorous studies of change management success and failure are required to assess the impact of each of these actions, additionally, each of these factors does not occur separately from the others. They do not happen in a forecasting sequence. Recommendations for resource management require better strategic approach.

• First, gain as much visibility into spend as possible.

• evaluate the potential of outsourcing; know what you’re throwing over the fence before you throw it. Only then will you have the information you need to decide whether outsourcing is the right path for your enterprise.