Outsourcing Strategies: Virtualization – The New Management Style (Part 1: The Theory)

Operating within an increasingly competitive environment, outsourcing specialists are constantly looking for new ways to meet their clients’ needs by enhancing quality, transparency, efficiency and flexibility.

One way to achieve these goals is through the management style of projects. Centralizing multiple projects in one site with one dedicated managing team has been a successful strategy for the past 15 years – both for SELLBYTEL and its clients. This approach is also known as “Single Point of Contact” (SPOC) management. We already covered this in a previous blog article.

But what happens if a program demands more than one site? The reasons for that include thresholds of resources, the need for stronger growth and speed in recruiting. Thus, a new approach is required to expand the centralized service into multiple sites. “Virtualization” is the next logical step to SPOC.

The following provides an overview of virtualization, illustrating its general value and the benefits for clients. In the second and final part – which forms part of an exclusive management paper – SELLBYTEL’s approach to the strategy is introduced and its core success factors are identified.

Definition of virtualization

In a nutshell, virtualization includes a central management team that operates a consolidated service across multiple international sites. This usually includes a homogeneous technology platform and standardized processes.

Which challenges do companies face in the management of international projects?

  • Diversity

Especially with projects covering regions like Europe or Asia, the great diversity of cultures and languages makes their management challenging. Usually, multiple centers are needed to provide services to the local markets. However, two locations double the workload for the client in several areas, such as the management of best practices across continents. So this needs additional management by the client – mostly regarding resources, time and coordination.

  • Quality

Most clients experience differences in the service quality from one site to the other, even with the same provider and more significantly, if the sites are located on different continents.

The service execution also varies: processes are different. Reports are different. Training is different. Hiring is different. This leads to additional costs in terms of money, time and customer satisfaction.

  • Management

Compiling data from different sources, e.g. different service centers, can be challenging. Different sources make it hard to draw the right conclusions and lead to lower data accuracy. Consequently, the control of results may lead to wrong decision-making. The challenge is to have comparable data in one place to enable the right business decisions.

What are the benefits of a standardized virtual service?

According to Philipp Grimm, SELLBYTEL Vice President Worldwide Sales, the key advantage of centralizing project management is efficiency: the enhancement of time, resource allocation and management processes. Less management is needed to operate multiple locations for one project. Since change management is centrally rolled out by one team, time is saved. There is greater service flexibility and speed, because more sites tend to create a stronger talent pool. As a result, team ramp-ups can be executed twice as fast as with one regional site. Moreover, central knowledge management standardizes all information within one place – easy to access, reliable and available at all times.

By having one dedicated global management team for all project sites, transparency is also increased across sites and with the client.

This service further strengthens the proximity between sites and connections to the client. This results in faster, more direct communication and decision-making processes as well as the ability to react quicker to market and volume fluctuations.

It also brings more direct insight and access to the client’s expectations, plans and satisfaction levels.

Using the virtual setup, uniform standards are set for reporting (i.e. one report for all sites), quality management, SLA (service level agreement) management, employee training and recruitment (e.g. criteria and processes).

To find out how the SELLBYTEL Group approaches this concept in practice, please access part 2 of the series, our detailed management paper.

Do you have any questions or comments? Feel free to get back to Philipp Grimm via Philipp.Grimm@sellbytel.de or marketing@sellbytel.com

Text: Anna-Luisa Wiefel, Philipp Grimm

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