REVIEWER kukunin niya sa client company since they are the one who is
looking for a specific service provider.
MODULE 4: MANAGING OUTSOURCING TRANSITIONS
On module 3 we discuss that for the client company and service
provider para magkaroon ng execution kailangan ay magkaroon
muna ng proper transition. Sa transition dapat lahat ng files, lahat ng
processes, lahat ng possible resources na pwedeng iturn over ni
client company sa service provider ay maibigay nila. It will be the
basis of the service provider kung paano nila gagawin yung mga
services na naidentify doon sa scope of work at sa master services
agreement.
CHANGING HATS- it means that from a client company wherein
they are doing the services or processes and activities now that they
are nakikipagpartner with the service provider so there is a change
on that specific process coming from the client company to service
provider. It is really important for the client company to provide the
necessary documents, the necessary resources that the service
provider will be needing when it comes to their operation but there
are some instances na si service provider halos ay walang nakuha
from client company sa resources, manpower, o kaya naman ay sa
mismong documents okay lang yon basta properly emphasize doon
sa MSA or SOW kung ano ba dapat ang kailangang iprovide ni client
company papunta sa service provider kung ang kanilang kasunduan
si client company ay mag aoutsource ng contact center and its up to
the service provider kung anong klaseng strategy ang gagawin nila
as long as magawa nila yung mismong output needed by the client
company.
TRANSITION MANAGEMENT- is a set of activities that
transpire after a BPO contract is signed that implements or
executes the detailed movement or transfer of processes from the
client to the service provider.
Note 2 things to consider in transition management: (1) BPO
contract that is signed by the client company representative and
service provider representative usually yung mga top management
an involve (2) the detailed movement or transfer of processes.
Why do we need have transition management? Di naman
pupwedeng na ang gawin nalang ni client company ay sabihin kung
ano ang kanilang kailangan then bahala na si service provider dapat
ang nagyayari ay properly coordinated si client company to the
service provider sa kung ano ba yung mga need nila there are
possible na yung need ni service provider ay kayang iprovide ni
client company there are some information na si service provider ay
hindi siya makakagalaw hanggat hindi ibinibigay ni client company
eventhough it is stated sa MSA at SOW meron pa rin dapat na
transition na nagyayari.
Example: doon sa ating government institution and agencies usually
kapag nagpapalit ng officials may nangyayaring transition period so
transition period na yon ang nangyayari ay nagkakaroon ng
pagtatransfer ng documents, ng knowledge, pagtatransfer ng mga
resources, yung mga tangible physical evidences natatransfer ng
mismong duties and responsibilities papunta doon sa kung sino man
yung papalit na official well same lang din dito sa BPO the transition
must be properly identified from the client company papunta sa
service provider and sometimes they are hiring a specific transition
manager.
TRANSITION MANAGER- responsible for migrating the
function or the process from the client to the service provider.
So, this transition manager has a vital or important function
pagdating doon sa paglilipat ng activities na iaoutsource ni client
company from information, task, and identified processes. Needs to
be an effective communicator, as the role requires extensive
interaction with the clients. So, in every transfer of duties and
responsibilities kailangan properly coordinated ang transition
manager if not ibig sabihin there is a potential that the transition of
the activities or the outsourcing activities ay baka hindi magkaroon
ng proper execution to the service provider.
SKILLS AND COMPETENCIES that a transition manager must
have:
(1) Strong project management skills as the migration process are
complex project that requires expert management skills. Ibig sabihin
kailangan marunong siya doon sa part ng mismong pagmamanage
ng project or yung activities na iaoutsource doon sa service provider
kailangan alam niya yung pasikot sikot. Example sa isang business
proposal dapat alam niya yung details na nandon sa marketing plan
na gagawin and operational plan lalo na sa operations na gagawin so
kapag nagkaroon ng question si service provider kung ano ba yung
mga dapat niyang gawin sa part ng operation so dapat alam niya.
Ang transition manager dapat marunong siya doon sa part ng
management skills na needed ng service provider at yon naman ay
(2) needs to be comfortable in working in a cross-cultural
environment. Example is for the contact center so some of their
clients are located from different country so kapag sila ay nag
aoutsource sa ibang bansa lalo na dito sa pilipinas so meron tayong
consideration pagdating doon sa culture ng ating service provider
same with the client company. So bilang transition manager dapat
marunong kang mag adopt sa kung anong culture doon sa client
company at service provider kasi syempre different location,
different practices, different culture dapat siyang makapag cope up
to those differences respective from client company to service
provider.
(3) needs to have a thorough understanding of the; existing
business and legal processes as well as emerging technologies as
these play a critical role in the offshoring of a business function.
Business and legal processes ofcourse magkaibang country yan they
have different legal or business processes alama dapat ng transition
manager yan. Kasama din ang technological aspect na dapat alam
ng transition manager since the location of the client company is
different to the service provider there are some technologies na
gamit sa client company na hindi ginagamit sa service provider na
country and vice versa so dapat aware si transition manager kung
ano yung differences baka si client company palagi nalang siya
nagsasabi na okay gawin niyo to need ko ganitong output e si service
provider yung technology na ginagamit nila sa kanilang bansa is not
applicable yet or hindi pa talaga nagagamit so dapat aware si
transition manager para magkaroon sila continuous plan on what
could be the possible techniques or strategies na gagawin ni service
provider para lang magawa yung output needed by the client
company.
TWO STRATEGIES FOLLOWED IN MIGRATING A
FUNCTION
(1) LIFT AND SHIFT
• is the process of migrating an exact copy of an
application or workload, together with its data store and
operating system (OS), from IT one environment to
another
Means from the word itself LIFT buhatin and SHIFT ililipat, yung
mismong existing processes na meron kay client company dadalhin
sa service provider. Example ang isang client company from other
country mag aoutsource sila ng service provider here sa Philippines
and nag agree si client company na ang strategy na gagawin ng
service provider ay lift and shift ang gagawin ni service provider ay
kung ano yung mga proseso na ginagawa ni client company from
start hanggang sa last ay same lang din ng gagawin ni service
provider. So, copy paste lang ang nangyayari, same procedure lang.
So, there are some instances na pwede nilang imodify ang proseso
base doon sa kakayahan or capability ni service provider. Pwedeng
magdagdag, pwedeng magbawas, at pwedeng mag retain or in other
aspect pwedeng dagdag bawas pero ang pang overall we got those
process in the client company na gagamitin ni service provider.
Madali kasi di na mahihirapan si service provider kasi meron ng
basis at may paggagayahan na.
Items to consider: (1) there are some laws in a specific country or
regulation or orders na dapat sundin ng mga outsourcing companies’
kaya nagkakaroon ng modification doon sa process pero ang
kinagandahan nito may basis si service provider para doon sa
mismong activities na gagawin nila to have the output needed by the
client company. Ayon lang ang mga challenges kasi dapat nilang
ialign kung ano yung mga bawal at dapat sundin ni service provider
kapag maggagawa at mageexecute ng kailang services. (2) major
effort: post go-live reengineering. So merong mga core processes
from the client company na need nila ituro sa service provider so
nagkakaroon ng transfer of knowledge from the employees of the
client company to the service provider it takes a lot of time pa din sa
client company para maibigay yung mismong need ng service
provider base on the MSA and SOW.
ADVANTAGES: As is basis process migration. Almost copy paste
kung ano yung mayroon doon sa client company na existing
processes yon na mismo ang gagawin ni service provider. Some of
the documents ay imomodify nalang, babaguhin nalang di na
kailangan na back to zero ang service provider.
(2) RE-ENGINEER AND MIGRATE
Rethinking and radically redesigning the business process to achieve
dramatic improvements.
Kung sa lift and shift halos copy paste dito sa reengineer and migrate
iba they are going to assess, service provider, yung mismong
processes na ginagawa ng client company and then ang service
provider were going to think to to find ways or identify the process
na gagawin nila para doon sa output needed by the client company.
Medyo matrabaho ito for example yung activity na business
proposal that is under the re-engineer and migrate back to zero dahil
need na magprovide ng details needed sa proposal. So fresh lahat ng
activities and ideas na ginawa.
Items to consider: systems change or process change. Company
changes its processes as part of transition to the service provider.
TRANSITION PITFALL AND RISKS
1. Inadequate investment and sponsorship. So,
sometimes the client company weren’t able to provide
the necessary money for them to have transition
management to the service provider.
2. Unclear scope of work. That’s why sa MSA at SOW
kailangan kitang kita kung ano ba mismo yung gagawin
ni service provider. Ano yung mga hindi nakalagay na
dapat ay hindi dapat gawin at saka syempre kung meron
mang dapat gawin si service provider na hindi nakalagay
sa MSA at SOW dapat ay clear.
3. Training shortcut. So doon sa lift and shift kailangan
itrain ng mga employee from client company yung mga
employee na nasa service provider so para mapabilis
yung kanilang proseso nagkakaroon ng streamlining of
the training of the service provider employee pinapaikli
nila na dapat naman ay hindi so nagiging risk or pitfall
siya.
4. Unclear roles and responsibilities. Why? Because if it
is not properly identified what would be the task or duties
of the people of the certain organization who is concern
on the outsourcing so magkakaroon talaga problem.
5. Not retaining the experts. Kapag nawala na mismo
yung processes syempre possible na mawawalan ng
trabaho yung people na nandon sa process na yon so saan
ilalagay, iyan ba ay ipapa absorb nalang sa service
provider or the client company were going to transfer
them to other department pero syempre pag nasa other
department na iba na iyong magiging expertise niya so
mas maganda if ilipat nalang yung expert to service
provider na siyang gagawa ng process.
These pitfalls can be avoided if the transition manager
constantly re-focuses attention to these things.
CRITICAL SUCCESS FACTORS
1. TECHNOLOGY READINESS. Yung service provider
dapat alam nila kung ano ano yung mga technologies na
gagamitin whether it is hardware or software para
maexecute ang kanilang activities na needed ng client
company or output na needed ni client company.
How ready are the enabling hardware and software to support
the on-going operations?
2. MANPOWER READINESS. Syempre kapag ikaw ay
nag outsource ng activity dapat ay palaging may tatao
dapat palaging merong mga employee or worker from
our human resource. Hind pupwede na meron lang
employees dapat ay properly trained dapat aware sila
doon sa activity or task na gagawin nila para maexecute
ang kanilang task para makapag produce ng output.
Are the operating staff hired, trained and skilled for the service
processes?
TRANSITION EFFECTIVENESS can be measure:
FINANCIAL BENEFITS- kapag nagkaroon ng cost cutting
or mas mababa yung ineexpect natin na magiging expenses
doon sa transition ibig sabihin ay nagkaroon tayo ng
effectiveness when it comes to the financial aspect. Sa isang
business we always put an indicator when it comes to the
finances pag mas mababa yung costing at expenses kesa doon
sa budget allotted it means we are effective enough or nagiging
efficient din tayo minsan sa finances.
PERFORMACE OF THE TEAM- once the employees or
the manpower or the workers were able to perform well during
the execution of the transition of what will be the task to be
transferred to the client company to the service provider so
nagkakaroon din ng smooth execution and nakukuha natin ang
proper output needed.
DOCUMENT READINESS
INPUTS- documented
➢ Source systems and dependencies.
➢ Timing of delivery quality assumptions, and work-
around in case of failure in delivery of some inputs.
➢ Historical timeliness and accuracy statistics.
▪ Helps size service provider
resources need, helps
identify likelihood of work-
compression or overtime.
➢ Format of inputs (structured or not)
PROCESSES- documented using the industry standard format
and in complete detail
➢ Hand-offs to other parties, internal and external,
documented, including timing and format.
➢ Interim/flash reports, if required, are documented
as deliverables. Delivery time, day-of-month,
period targets are documented.
Required tools, macros, workflow, application, shared
directory access are listed in sufficient detail to allow
replication in the service provider.
OUTPUT- interim/flash and final outputs are completely
documented
➢ Formats are completely defined.
➢ Control steps and quality assurance checklists are
defined.
➢ Delivery time/day-of-period are defined; these are
reviewed to ensure they are achievable/consistent
with input timelines.
➢ Service provider and transition project manager
should validate that timelines are current and not
“aspirational”, tendency to put in
desired/unrealistic deadlines when outsourcing.
COMMUNICATION- channels for output to be explicitly
defined
➢ Clarity here minimizes misunderstanding during
early production period.
➢ Especially if the output is an input to another
process.
SUPERVISION- onshore supervision points and what will be
reviewed/ checklist should be defined
➢ Some country regulations (US) require clear trail
of supervisory control by an Onshore person.
Responsibility for output (e.g., financial
statements) rests with an accountable Onshore
officer.
➢ For shared service centers particularly, clear
documentation on areas of supervisory review
paves the way for transition into "center of
excellence" mode where supervisory control rests
offshore.
IMPORTANCE OF PROPER DOCUMENTATION
Documentation helps to ease the burden for already stressed service
representatives and sets the stage for proactive, efficient, and
effective customer service, which in turn draws customers closer
and engages them with the company for a very long time.
Documentation helps members of an organization connect and have
similar goals because all issues and challenges are documented and
can be accessed by anyone. They can then work together to ensure
that excellent customer service is delivered. Meanwhile, all the
members must have this documentation management skills.
WORKSHADOWING
is the term used for "learn-by-doing" activity of service provider
personnel, generally done at the same location as current company
performer
Phases:
1. Onshore personnel doing activity
• Onshore personnel perform activity, conducts training;
service provider personnel observe how client does the
task
 • May be done at Onshore location with service provider - Are the inputs received all throughout the month or do they peak
staff travelling; may be done at service provider location on a single day/period
with Onshore staff travelling
• Service provider staff reviews documentation provided • Peaking inputs may require peak-basis staffing to keep delivery
against actual activity done by Onshore personnel
target
• Changes in documentation are done
• Re-sizing of required staffing may be negotiated at this • Extra cost of peak personnel
point
• Challenge of work scheduling to use staff during low periods.
2. Guided service provider network
-Are inputs received only on defined days
• Service provider performs the activity; Onshore personnel
looks over and gives close guidance • Do those days coincide with month-ends
• May be done Onshore or at service provider site
• Completes 1 or 2 full cycles: if output is monthly, guidance • Less opportunity to do work scheduling of off-peak staff if work
is given for 2 month-ends; if output is daily, guidance is given peaks are the same.
for a few days
• Generally, 1 to 2 months of guided work -Are dependencies documented i.e., OO output from another

3. Go-live system/process must be received first before PP input can be

delivered.
• Service provider performs the activity independently at
service provider site -Which inputs are delivered by external systems, which by internal
• Performance targets in place and required
systems
• Changes in sizing or process (to correct erroneous
training provided by onshore) now falls under change- • How stable are the systems (do they go down regularly)
request process and governance
• Need to closely monitor for a period of 3 months to -Are there work-arounds in case of input system failures.
ensure stable performance
d) How accurate are the inputs (quality of input)
READINESS ASSESSMENT is served as a model of determinant
or impact on the success of o u t s o u r c i n g . -Are there base/historical accuracy statistics. Can be used to
justify/cost of measures to improve accuracy.
READINESS ASSESSMENT verifies if process to be outsourced
is: -Input errors cost money in terms of re-work.

1. Adequately documented. -Poor quality of input means prior to validate input must be added.
2. Correctly-sized
3. Resource sizing already includes the right level of d) How consistently delivered on time (timeless)
quality assurance and supervisory control
-Are there historical timeless statistics. Can be used to justify
Adequate documentation is needed for: investment in faster platforms, in process improvements.

1. Input -Late inputs cost money in terms of overtime.

2. Process
3. Output -"Compressed work-day" burden on performers (doing 3 hours
4. Communication worth of process in 1 hour to deliver on time).
5. Supervision
Adequate Documentation (Process Checklist):
Consideration for input
a) Are the process properly documented
1. Properly described input b) Are hand-offs to other parties (internal and external)
2. Method of acquisition shown in the documentation
3. Language of input c) Are interim or “flash” reports documented
4. Timing of the input d) Are delivery time/day-of-month/period targets
5. Dependencies documented

Adequate Documentation (Input): General rule of thumb:

a) What are the inputs • If documentation length exceeds the output materially, that is too
low a level.
- Is there documentation listing/describing the inputs?
• Lowest level documentation going beyond 2 to 3 pages is too
• Many onshore processes performed by long-time staff would not much.
have existing documentation.
a) Are the process properly documented
• Key to know where there are gaps to understand areas and cost
-What documentation standard
of remediation.
• Process maps (who performs, what are the hand-offs to other
-How are the inputs received?
performers) are intuitive.
• Are they in structured form (consistent) or are they in verbal, email
or even spreadsheet freeform. • Using a specific standard is not important; it is important that a
standard is consistently used.
• Structured input makes straight-through processing easier, requires
less business acumen on part of performer. • Must go beyond high-level process

• Less training for processor to start, faster growth from new hire to • Must document actual outputs sufficiently to allow a qualified
performer (with xx years experience in yy process, with aa academic
productive performer. training) to replicate output.

• Unstructured input data points to early area for process • Must be simple and straightforward.
improvement, efficiency gains from straight-through processing. ---
Are inputs in same language as that of provider b) Are the hand-offs to other parties (internal and external) shown
in the
• Can communication onshore be done in same language as that used
by provider documentation.

• Different language adds cost in terms of language
translator/specialist and "funnel" effect.
b) Is there an input data timing condition (can be received only on
business day X)
-Clear documentation of hand-offs show areas of "process
fragmentation".
-Hand-offs are transfers of the task to other people before
continuing.
-Aggregate items to review in a single sign off step at the end
-May be better to require enriched data prior to start of the process-
i.e., intelligent input template or train performer to do the data
enrichment.
c) Are interim or "flash" reports documented
-Flash reports allow onshore supervisors to do early process checks.
Regulatory submission deadlines are hard, hence critical outputs
may need intermediate review.
-Ideal that the process continues without waiting; only stop by
exception.
- d) Are delivery time/day of month/period targets documented -----
Indication of required delivery time/date important in the process
documentation.
-Quick look at input receive and output delivery allows check of
process ease and staffing requirements -
-Tight processing times (late input, early month output) shout out
opportunities for required technology/process improvement.
What are the steps of the delivery of a process or service in
contracting of a service provider
- Delivery targets
- How
- Supervision
- Cost
Adequate Documentation (Output):
Consideration for output:
1. Properly described output
2. Method of transmission
3. Language of output
4. Timing of the output
5. Dependencies
Are outputs completely documented:
-Formats defined. In key management reports, down to the colors of
certain data.
- If output is an input to another process, best that structured
template is followed.
-Periodic changes in outputs (and in contents/format within output)
are normal but the change requests should be documented, cost-
justified, and properly approved.
Adequate Documentation (Communication):
How are the outputs to be communicated:
-Transmission channel has to be clearly stated-e.g., email, file
upload into MS Sharepoint.
-As input to another process in workflow or direct entry to another
system.
Adequate Documentation (Supervision):
Consideration for supervision:
1. Onshore
2. Offshore
3. Staffing, Equipment, Motivation
4. Country Regulations
Where are the “onshore” supervision points
- Some country regulations (US) require supervisory control by an
Onshore person-i.e., ownership of the output is with the Onshore
person.
- In Onshore exercises who has "supervisory control" work and
supervision is done in another location
- In shared services, next stage of evolution is true centers of
excellence where work and supervision is done in another location.
• Onshore processes with adequate documentation have greater
readiness for offshoring.
• Documentation on inputs, processes, outputs, communication
channels, and supervision allow a service provider (third part or
shared service center) to estimate cost of doing the service offshore
with more certainty.
HAND-OFFS
Definition: Are transfers of the output to a different performer, an
approver, for further action prior to continuation.
Hand-offs, reasons for.
1. Data enrichment. The other performer adds data to the transaction.
2. Quality Assurance. The second performer is a checker.
3. Control Approval for materiality and substance is done by a
separate person.
How will you get paid...
1. Paymaster creates initial employee pay record
2. Timekeeper reviews overtime records to adds overtime pay
3. Payroll clerk reviews loan records for loan deductions
4. Payroll clerk looks at reimbursement records to add payments for
expenses advanced by the employee.
5. Payroll clerk looks at enriched pay record and calculates right
withholding tax.
6. Payroll supervisor views the whole pay approves.
7. Paymaster submits net salary to the bank for payment.
SCALE Sufficiency – tips to optimize
Number of employees (manning complement, head count, full time
requirement FTE) Sufficiency of scale depends on the following:
• Service provider
• Requirements of the job
• Client
Scale in relation to workforce
Sufficiency of scale depends on the service provider for risk
management.
• A 15,000 FTE provider in a single location may prefer
engagements of at least 500 FTEs (5% is normal buffer of resources,
can be ramped up easily or absorbed in other clients when contract
ends).
Right scale depends on client percentage of outsourced roles to total
staff, for risk management and control.
• A 500 person finance organization may want to limit initial
outsourcing to 10% or 15%.
• A large company with experience in outsourcing may opt to
outsource the entire technology group(from data centers to
application development to helpdesk) to a provider especially if core
business is non-IT.
• If the process to be outsourced is done by only a few FTEs (full
time equivalent), it is not worth outsourcing.
-Example: Create letter of credit. But the role is only done by one
person who does everything, or 1 person full day plus a supervisor
for 1 hour a day. Near self-contained roles have good potential for
outsourcing because more
• Near self-contained roles have good potential for outsourcing
because more FTEs covered
-Complete help-desk
-Mortgage processing from application form acceptance to
creditworthiness points calculation, to annotation of loan on deed,
to title insurance submission, to recommendation for funds release.
• End-to-end roles are ideal (start from external contact, ends with
external contact, with 1 or 2 intermediate hand-offs for
review/approval).
-"External" contact can mean external to the process
-Product P&L (profit and loss) starts with transaction data download
and ends with submission to regional/senior managements;
intermediate activities (market price verification, calculation of
mark-to-market value) are fully done by service provider.
• Buyer needs sufficient FTEs in outsource project to justify risk and
executive attention (sourcing management, finance/payments, legal)
• What is the amount saved. If it is too small, the cost of onshore
supervision eats up the benefit.

• Service provider needs sufficient FTEs (margins) to justify a risk,

supervisor (operations manager attention), and overhead (finance,
billing, legal).

• Large and small engagements have near same "overhead" in

support except for very large contracts

• Training

• Improve hardware and/or enhance software.

IDENTIFYING TASK CANDIDATES FOR OUTSOURCING

• Break down current onshore roles into individual tasks that have
scale (high number of FTE hours)

• Tool for task analysis can be:

-Follow the performer: consultant follows a performer and tracks

time spent in each task; called "stop-watch" method because
consultants carry timing devices.

-Time-tracking: each current performer tracks his activities, how

much time is spent in each task, over a period of 1 to 3 months.

• Time tracking into granular task buckets is a good way to identify

potential roles for outsourcing.

• Helps managers assess whether the work can be simplified.

-Challenge of simplify now or later

• Recording how much time is spent each day in specific task groups.
Highlights tasks that occupy a lot of people's hours

• Some high-volume tasks may need thorough analysis to identify

specific roles.

-Tempting to wait and do more granular time tracking and further

analysis. Be wary of analysis paralysis.

High FTE hour numbers are directional pointers for resourcing

-Other "sub-filters: (a) do not require complex market knowledge,

(b) do not have high financial or regulatory risk, (c) tasks which are
self-contained (have minimal hand-offs).

Identifying task candidates for outsourcing: Candidates

• Finite

• Documented

• Sufficient of Scale

Identifying task candidates for outsourcing: Considerations

• Readiness assessment

• Level of documentation of onshore processes • Scale: sizing

savings based on current performer count

• Time-tracking or task-based FTE assessment

• Prioritize roles that are "more ready" Lift and Shift for less
documented roles

• Cost of low outsourcing readiness

Components of readiness:

• Scalable Talent Pool

• Cost

• Excellent Infrastructure

• Government Support & Public-Private Partnership