Coronavirus: 5 Reasons to Reassess your SSC & Sourcing Model
In a short span of time, Coronavirus (now COVID-19) has become a global threat. Worldwide, many corporations have taken steps to minimize its impact ranging from working remotely, restricting travel, and in few cases even shutting down their offices. All of it obviously will have an impact on business and delivery.
But let us also consider, in the wake of Coronavirus, how organizations can use the opportunity to test the robustness of their global delivery models and make amendments, if required.
Here are a few things to consider:
1. Business Continuity Planning and Disaster Recovery plans
This is the time to do a real test on your BCP and DR plans. Most of the time BCP and DR plans remain on paper and are hardly tested. Use the opportunity to test and fail them. See how your processes get impacted when a few delivery centers are not working. Check how your service provider can support you if their delivery is impacted. Remember this is not failure of power or communication, which can be restored in few hours or days. This could be a failure of operations for many weeks. How will your operations suffer if your delivery center in Manila or Bangalore is not fully operational? Make note of the impact and improve your BCP/DR plans for the future.
Most of the global 1000 or 2000 firms have healthy outsourcing of IT and BPO operations to offshore countries like India, China and LATAM. Consider: Have your operations been impacted due to a situation where your outsourcing partner is unable to deliver services fully? How has your outsourcing partner reacted and fulfilled its obligations? Were they and their teams able to perform activities remotely from other locations? Has it slowed down the response or impacted the cost of delivery? It’s time to re-assess your contractual and delivery relationship with service providers.
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3. Shared Services Centers
Just like sourcing providers, it is also time to test the operating model of shared services. Many firms have multiple delivery centers across the globe – a good strategy is to hedge your delivery risks. Now is the time to analyze the impact on back office operations if any of the SSCs are not functioning properly. How does it impact your delivery operations? Do you have a strategy to deliver operations from another delivery center if one of your delivery centers goes down? Is it a cost-effective model, or worth the risk?
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Generally, situations like political unrest or economic impact are country-specific. However, situations like coronavirus have a global impact. So, while having multiple SSCs may not be a fool-proof solution it certainly helps you hedge the delivery risk. A hybrid delivery model spread between SSCs and outsourcing providers also needs to go through effectiveness testing at this time. The ability to switch a portion of operations from SSCs to providers, or vice versa, is a good strategy to mitigate risks.
4. Automation and Cloud Strategy
Now is the time to test the potential of your automation and cloud initiatives. How do your BOTS perform with limited human intervention? Do you have enough BOT capacity to have minimum uninterrupted services? If not, build a plan so that you have developed capacity to lean on BOTS when humans are impacted. This is the time to validate your automation strategy. Similarly, such situations also call for revisiting your cloud strategy and how cloud solutions support BCP and DR planning.
During such epidemics, when it may be difficult to physically support your Data Centers, can you rely on alternate cloud solutions to trigger BCP? Do you have a mechanism in place so that during BCP, you can shift to cloud-based solutions and infrastructure to provide that additional support as required?
5. Sourcing Contracts
Has your provider proactively initiated continuity planning? Was it appropriately covered in the contract? Quite often you find contracts having clauses protecting parties during events like Force Majeure, or disasters beyond human control. However this is the time to test whether your provider will go beyond contracts and assure service delivery? Can they start delivering services from other locations temporarily? The best relationship between a client and service provider is when both parties stop referring to the contracts and focus on the relationship. Having said that, it is also an opportunity for clients to appropriately cover their risks through proper contractual obligations. Flexibility to change delivery model and variability in scope of services during such times is an important design criteria in sourcing contracts.
We hope that global operations restore at the earliest convenience, and that the impact of the virus is minimal. However, it is our duty to also protect delivery and operations of various business.
Such situations, if looked upon positively, help us prepare for a better future.
SSON PODCAST: For some lighter audio relief, this week I’m listening to Seth Adler ask GAF’s Gerald Lackey about Business Optimization and Agility. Gerald’s key focus is business outcomes and he shares a good tidbit or two, Seth tells me!