How to Outsource Your Payroll

There are a number of benefits to outsourcing payroll. This will allow a business to eliminate any bias in the payroll procedure. Or it might alleviate a heavy load the accounting department already carries. A business may also discover it is very cost-effective. Whatever the reasons might be there are needed procedures to follow.

The key to successfully outsourcing your payroll is interviewing and identifying the company that meets your every need. You need to shop around. You need to compare costs. You also need to compare services. You need to feel completely satisfied with the company you choose.

Once you have narrowed your choices to two or three outsourcing companies you need to meet with each of them to get a "feel" for their techniques, personal inter-action, and knowledge. You will find that some of the companies still use paper and pencil to do their payroll while others have sophisticated electronic payroll programs. If you choose the latter it may cost you additional money. If this is the case you need to make certain that all of the additional paperwork they offer is really valuable for your needs or not.

You need to determine how each company handles confidentiality. Everyone is aware that the number of identity thefts is increasing each year so you need to understand what the company has in place to prevent this. Once you select the company you should distribute a report to your employees explaining how the payroll company handles security issues.

After you have selected your payroll company make certain there is frequent contact. It is not wise to have a company that delivers your payroll to your office whereby you have no additional contact. You need to meet with a consultant from the outsourcing company on a regular basis. This will keep communication open as well as ensure excellent quality control. It will also cause the company to be aware that you are on top of what is going on whereby they need to do their job.

Finally, if you have a large staff you may choose to ask for a payroll program that utilizes time cards. Some of the companies may not be able to meet this need. Larger companies may have a variety from which to choose. This is one example of the contrast between a larger company and a smaller company. If you want more personalized service then a smaller company is your wiser choice; if you want the latest in technology and up-to-the-minute payroll changes and software then a larger company is your best choice. Whatever you decide, it is important to first do your homework.

Ceridian is the UK's leading provider of HR and payroll services, flexible benefits and employee assistance programmes (EAP). Visit Ceridian online and find out what payroll solutions suit your business

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Outsourcing - The Next Phase

Industry analysts have been predicting for months that India's capacity for taking in American outsourcing work is starting to stretch its limits. The government has always taken steps to restrain continuing growth, but now we're seeing the American companies taking action. They are deliberately moving some of their outsourcing capacity to the next-step destinations, such as the Philippines, China and Vietnam.

India's government was right to try to restrict growth, because the resulting rise in costs is now being realized and passed on to the American companies.

Sykes is a large US-based contract center and IT support organization with operations in both India and the Philippines. It has recently announced it will move much of its capacity from India to the Philippines. For a company of this size to make this drastic of a move means the price differential is substantial.

GXS is another global business-to-business service provider who is moving operations with strong customer service components to the Philippines. They have found better economics and results there. They're leaving their product development operations in India. Overall, they feel that this arrangement minimizes risks.

A recent investment decision is further evidence of the growing interest in the Philippines as an outsourcing destination. Ambergins Solutions, a large call center operation, just received an investment of $43.5 million from a Canadian-based global IT solutions provider. A company source said the Asian Pacific region appeared to be the best long-term opportunity of anywhere, including India.

RCG Information Technology is another large IT service provider. They have stated clearly that they do not intend to make India a part of their strategy for the foreseeable future. Instead they have targeted the Asia Pacific region for further expansion and already have a presence in the Philippines. Their analysis revealed that India's prices are rising, due to the overcrowding of clients there. Employees are jumping from one firm to another to get better pay. This is causing overall prices to increase, while skill levels sink. They have found English communications skills to be superior in the Philippines.

Hewitt has begun hiring for its new BPO facility in the Philippines. So has HSBC, the international banking concern. On the flip side it has been reported that Indian nationals working here in the United States are being wooed to go back to India, where demand for their work is high. They are having trouble doing so, however, because their salaries are traditionally so much lower than in the U.S. This, too, is contributing to India's increasing rates, as they start to face the downside of fiscal globalization.

But don't count India out yet. India created the offshore outsourcing model and its continued managerial competency will drive it forward. It still dominates and enjoys a fine reputation and attractiveness worldwide. Its current growth slow-down does not indicate weakness but, rather, great success. If places like the Philippines and Vietnam have not been quite as successful, they are learning from India how to attract their share of quality and sizable outsourcing employers.

Michael Russell Your Independent guide to Outsourcing Article Source: http://EzineArticles.com/?expert=Michael_Russell

Should You Outsource Your Business Marketing?

If you've been pondering whether or not to get some help with business marketing and other aspects of your business, here is some food for thought. Deciding to take an aspect of your business and give it to someone outside your company is a decision most business owners don't make lightly. You have to feel like you've found the right business consultants and that outsourcing is going to benefit your organisation in a way that exceeds the costs involved.

What should you look for in a business marketing consultant?

If business marketing is an area you're considering getting expert help with, you'll want to find an expert that understands your business enough to help you effectively compete in the current business landscape. It's also important to find an expert who can help you in the future as well. Businesses today need to compete now and they need to use a visionary approach as well so that they can continue to compete in an evolving business world. A marketing specialist is more equipped to do that than you are. As a generalist, you have a million things to focus on every day whereas a specialist focuses on a specific aspect of your business and this can mean better results.

Have you unleashed the potential of the Internet yet?

Your consultant should be able to help you offline (if your business exists outside of the Internet) as well as online. Marketing approaches aren't necessarily the same both on and offline and if you're not dealing with someone who can help you get traffic and make sales on the net as well as utilise many of the productivity tools that exist, you're not going to achieve your goals both from a customer relationship standpoint and from the perspective of profit potential.

Why else should you think about outsourcing?

If you're a solopreneur or a small business, outsourcing the marketing aspect of your business could help you do more without adding extra staff or extra hours. If you staff your organisation with full-time personnel, you're paying for hours, benefits, and holiday and at times, idle hands. If you outsource these functions, you're usually just paying for results and expertise as well as cutting edge technology as and when you need it. This can help you to focus on your core business objectives as well as give you more work / life balance. Too many of today's businessmen and women spend 80 hours trying to wear too many hats. If you outsource some of the tasks, you can focus on your specialty. There are outsourcing opportunities for you to consider for several aspects of your business such as warehousing, fulfillment, sales, customer service, and business marketing and while you might not want to sub out everything, marketing is an area that could make a very positive impact on your company's success.

A business marketing consultant for many years, Chris Jenkinson specialises in marketing advice. He provides further advice about consulting services on the GizTheBiz blog.

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What Should Not Be Outsourced

With all the talk about outsourcing today, many companies are using it to accomplish more and more tasks. But there IS a limit. In fact, there are three of them:

Cost - When it is more expensive to outsource than to do it in-house, outsourcing is a bad idea. This isn't often easy to determine. Sometimes the outsourcing expert may quote more than in-house costs because the expertise is rare and the market rate for the service is high. You might be better off hiring and training in this case. Take into account the employee training, salary and benefits vs. the outsourcing firm's quote. There are some intangibles that need to be considered as well. Outsourcing may come with some expertise that you might not have in-house. How much will that save you in working out issues?

Loss of Control - No matter what the project, you always want the reins to be in the hands of company employees and executives to thoroughly understand not only the project, but also the overall company goals and direction. Without that essential link, the project could inadvertently veer off in an unwanted direction. In addition, the company will be responsible for the results of the project; so it needs to be a vital part of every decision made. The best case scenario is an every-day contact and update. When this cannot be worked out with the proposed outsourcing firm, strong consideration should be given to looking elsewhere, including in-house.

Contractual Restrictions - Of course you should never outsource tasks when you are contractually obligated to perform them yourself. Check your client contracts carefully for such language and be sure you get permissions needed before embarking on any possibly conflicting outsourcing arrangement. You need to review each contract individually, not just your "standard" contract, as it is well within the rights of any customer to insert such a clause. Breaching this agreement could result in non-payment with little chance of legal recovery.

You'll notice that the three reasons given do not include what is usually considered a rule of thumb - outsource support functions, but never core functions of your company. In general, this IS true. But there are examples where outsourcing a core task turned out to be a wise idea. For example, a paper called "Pasadena Now" in Pasadena, CA hired two journalists in India to cover local news and events in Pasadena.

Wait, what??

It turns out this is a highly competitive market. And since California has very open public access laws, virtually all government documents, meeting minutes, press releases, etc. can be regularly found on the Internet. Publisher James Macpherson said, "We do not believe that geographic distance between India and California will present insurmountable problems and that working together with you will result in your development of a keen working knowledge of this city's affairs. This will result in accurate and authoritative news reports".

And the cost savings gleaned from this surprising action? Well, we're not sure how much they normally pay reporters, but they hired these two for $20,800 annually. Combined.

When it makes this much financial sense, can you blame the company for doing it? Perhaps not. But if you're an unemployed reporter from Pasadena, CA, you might have a different view.

Michael Russell Your Independent guide to Outsourcing Article Source: http://EzineArticles.com/?expert=Michael_Russell

Outsourcing Trends in Europe

European companies are finding financial benefits to outsourcing and are doing it more and more. The primary difference between American and European outsourcing is nearness. When an American company does offshore outsourcing, very little consideration is ever given to nearness of the vendor company. Technological developments have made this statistic negligible.

So why do European companies look for outsourcing destinations closer to home? For one, they see benefits in having the people to service their customers be personally familiar with their culture. They find comfort in the vendor company being in the same time zone. But perhaps the biggest consideration is language. This is something the American outsourcing companies don't have to worry too much about, because the English is spoken widely throughout the world. In addition, vendor companies wishing to secure American business have their own English training processes for employees.

One of the biggest areas of European "nearshore" outsourcing is the IT function. These can be classified into three types of outsourcing: project based, dedicated center and captive operations.

The most common is project-based outsourcing. This is where the vendor company is hired to run or assist in completing a specific, usually long-term project. When the project and all follow-up work are complete, the relationship between the hiring company and nearshore outsourcing destination company is over.

The "captive operations" type of outsourcing is where the company sets up its own office in the nearshore location, usually an Eastern European country. There they hire native workers, but still management from their own country. This is possibly the most risky strategy in terms of investment capital required, operational efficiency and organizational issues. This path is sometimes appropriate for large and multinational companies prepared to take these risks and familiar and ready for the personnel and staffing issues.

A growing strategy is that of "dedicated development centers" (DDCs) which is less costly than the captive operations strategy, but works well in a long-term relationship approach. DDC involves having full-time developers working exclusively on client projects for a prolonged period of time. Although technically these people work for the vendor company, it is like having a virtual extension of the client office in the nearshore country.

DDCs can be further categorized. A dedicated team model, for example, is very common. In this model the vendor provides the facilities and allocates the team, but the client has full operational control.

The term "tailored DDC" is used to describe a facility tailored to the custom business model, with specific technology needs and perhaps special organizational structure. These can be product development centers, research and development centers, software maintenance and support centers, application reengineering centers, quality assurance centers, etc.

A joint venture DDC is often a transitional stage working towards a captive operations style of outsourcing. Both vendor and customer support it. They share the risks and responsibilities.

The "build-operate-transfer" option is similar to the joint venture DDC. In this case it is designed, specifically, to be turned into a captive operation. The vendor sets up the business infrastructure, hires personnel and establishes and runs the center for a predetermined length of time. Afterwards this facility is turned over completely to the client.

Many European companies wanting to outsource all or some of their IT functions are turning to one of these methods of DDC outsourcing.

Michael Russell Your Independent guide to Outsourcing Article Source: http://EzineArticles.com/?expert=Michael_Russell

Businesses Outsourcing Data Entry

Outsourcing is a business strategy in which a company hires another company to perform specific tasks rather than hire employees to take care of it. This is usually done on a support function so that company personnel can concentrate exclusively on the primary business of the company.

Companies who provide outsourcing services are sometimes called "business to business" companies, as their customers are other businesses rather than individuals. From this broad definition, all companies outsource. Even if you're a sole proprietor, you can be said to be outsourcing when you buy office supplies. After all, it would be totally inconceivable to make them yourself! You depend on the experts in the office supply industry to provide suitable materials.

One of the largest and most adaptable outsourcing services commonly utilized by all kinds of companies is data entry. In fact, the demand is great and data entry services firms are growing rapidly.

A company's data is one of its most valuable assets. Gathering it correctly is essential to its ability to make good business decisions. Therefore, a BTB firm seeking opportunities of this sort must be very detail oriented, have a good employee training system and be prepared to create and administer a much customized project plan for your company. They could be doing many kinds of data entry work, or they may specialize in a specific type; like medical billing.

Often a company is a provider AND a purchaser of outsourcing services. A good example is a bank. Banks, of course, provide financial services to individuals and businesses and that is their primary revenue source. In order to support this income, they may outsource their payroll function to a company that specializes in that activity.

However, many banks also provide outsourcing services in the form of data entry for their business customers. One popular example is lock box payments. In this outsourcing arrangement, all of the client company's payments on account go directly to the bank. The bank opens them, applies the cash to the appropriate client account and deposits into the client's bank account. They do this either by direct access the to client company's payables systems, or they could do it separately and send a daily file of all transactions to the client company for them to take into their system in batch fashion.

There are many other types of data outsourcing provided by a wide range of companies. Some companies that may provide ancillary data entry outsourcing services are medical research facilities, universities, direct marketing firms, newspapers, insurance companies and trade organizations.

Availing yourself of the benefits of data entry services can provide tremendous opportunity for your company. Those who provide the services do so very efficiently and are already set up to do it quickly and accurately. The cost factor is often lower than what the company would spend on salaries and benefits if they did the data entry themselves. Couple that with the disruptions inherent with a larger staff and you'll find outsourcing is not only a viable alternative, but also a preferred one in many cases.

Michael Russell Your Independent guide to Outsourcing Article Source: http://EzineArticles.com/?expert=Michael_Russell

Business Value of Outsourced Product Testing

Introduction

The recent sharp downturn in the economy is forcing independent software vendors to reconsider their approach towards product engineering. In light of the new business realities, companies are forced to consider how they can reduce their R&D budget, or get higher return on the same or incremental investments. However, it is becoming increasingly important for ISVs to enhance customer loyalty and reduce support cost! ISVs are realizing that one way to achieve this is by improving the quality of the product without increasing the cost of quality. Consequently, ISVs are actively considering outsourcing non-core functions like testing to cut costs quickly, avoid new capital investment, and improve product quality.

Why Outsource Product Testing

Testing is a vital phase in any product development initiative. Frequently changing requirements coupled with a reduced product development life cycle has increased the pressure on testing teams to do more at less. They face time crunch as well as resource crunch. A survey conducted by the National Institute of Standards and Technology (NIST) has found that US companies spend as much as $60 billion on fixing software defects at the post-release stage. This study also reveals that third party QA & Testing could have saved companies nearly $20 billion. The direct cost of quality in terms of staff time by itself is a compelling reason for considering QA & Testing outsourcing model. Though it is difficult to measure, the loss of revenue in terms of repeat business, due to unhappy customers, is also significant. A well structured outsourcing model can help ISVs reduce cost (by using less expensive resources) and increase the quality of the product, which ultimately results in satisfied customers. Migrating to an outsourced product testing model, where the onus of product quality is shared with the participating testing company, will give product companies a competitive advantage in the marketplace.

Current Situation - However, as per a Forrester report published in 2008, despite the enormous potential benefits of outsourcing, not many organizations currently outsource their testing activities. According to a survey of IT leaders, only 16% of organizations outsource software testing while 16% expect to outsource to a third party in the next 12 months. Though another 29% were considering using a third party for this service, a substantial 39% were not in favour of using this service. While this is one side of the story, the outsourced testing market is actually experiencing a rapid growth, and according to the same Forrester report, outsourced testing services is growing at 50% annually or higher. There is a growing awareness that software product testing is a specialized skill, and cannot be accomplished merely by any developer. But it is becoming increasingly difficult for CTOs to allocate enough funds to hire expert resources, or train the existing resources to meet the demand. As a consequence, product quality is increasingly being compromised.

Offshore outsourcing

Though ISVs are slowly getting convinced about the benefit of outsourcing their QA activities to offshore partners, in most of the cases they merely treat this as a cost saving measure. Offshore outsourcing of product testing, if treated strategically, can yield more than just cost benefit. However, treating offshoring as process of simply moving existing software product testing to an offshore outsource partner may be counter-productive. Executives making the decision to offshore testing must draw the strategic plan for outsourcing, define their goal, and last but not the least, must understand the possible pitfalls of outsourcing. This will enable them gain maximum from their outsourcing initiative.

Challenges Faced in Outsourced Product Testing Activities

We all know that product development, being a more intense & involved process, differs from application development. Similar is the case of product testing. Hence, outsourced product testing comes with its own set of challenges. Some of the major challenges faced in outsourced product testing are:

• Partner integration: Success of an outsourced product testing initiative is based on the integration of methodology, usage of proper tools & technologies, and a right-sourcing approach. It is easier said than done. And is normally is the primary reason for failure of such initiatives.
• Proper communications management: Due to language and cultural barriers, time-zone difference, physical distance, and poor processes, many times it becomes difficult to have an effective communication process.
• Mismatched or miscommunication of expectations: Absence of a well-defined goal and an ineffective oversight process, along with poor communication, can create difference in expectations
• Lack of product engineering focus: Most of the offshore vendors are application service providers. Hence, they do not have the required expertise or more importantly, the necessary product mindset to test a product
• Management issues due to the lack of a workable test management process and associated methodology
• Vendor problems or vendor infrastructure problems such as poor data bandwidth.
• IPR protection concerns

Overcoming the Challenges

Many of the barriers associated with Outsourced Product Testing activities, as mentioned above, can be overcome by selecting an experienced and reliable testing partner with requisite product engineering expertise, quality orientation, structured processes, proven credentials, and an impeccable record on protecting its customer's IP. This will ensure that product engineering principles are in use and best practices are consistently applied. Cost advantages are achieved through various means such as - optimization of the testing process, test automation, leveraging low-cost test centres. When successfully planned and executed, outsourced product testing can reduce the overall product engineering cost by 40% or more, as well as shortening the time to market and improve overall software quality. But to ensure the best possible results from product testing outsourcing initiative, you must:

• Hire specialist companies to conduct product testing, These companies should have strong background and proven track record in providing Product Engineering Services
• Plan the process thoroughly. Invest time upfront in benchmarking current performance thoroughly and prepare detail business case to ensure that the provider delivers a tangible return on investment
• Do not focus only on cost reduction. Take a strategic view of the engagement and select a partner rather than a vendor. This will ensure that you gain other tangible and intangible benefits
• Give proper importance to outsourcing location. Evaluate parameters such as past history, availability of skilled manpower, language capability, political stability, stable economy, etc., along with cost structures

Outsourcing Benefit

Cost savings, though a major result, is not the only benefit of outsourced product testing. Benefits from an outsourced product testing initiative become more significant when combined with a global delivery model and right-sourcing model. In addition, companies that have already out sourced their product development process will be benefited by using an independent third party for testing. Here the testing partner works as a certifying authority, providing unbiased insights into improving product quality. Following are the benefits that come out as a result of a successful outsourced product testing initiative.

• Higher return on QA investment: ROI of a product quality initiative includes the savings occurred due to decreased rework, increased customer satisfaction, lower support costs, and decreased product maintenance cost. An outsourced product testing program, if executed successfully using an offshore/ dual-shore model, not only lowers the cost of testing by reducing staff cost, but also helps to increase product quality. A company can save up to 40% in direct staff cost and another 10-20% in associated costs through outsourcing model.
• Shorter Revenue Realization Cycle: Outsourced product testing can help reduce time to market with the usage of additional skilled resources and test automation. This helps the company to reach market faster and protect/create competitive advantage. Hence, outsourced product testing initiative helps companies shorten their revenue realization cycle, which means they can achieve more with less capital or invest the free resources in growth related initiatives.
• Improved Efficiency: If properly planned, a well defined outsourced testing engagement can bring improvements in quality and delivery processes. Outsourcing engagements are governed by defined Performance Metrics (PM) and Service Level Agreements (SLA). Outsourced testing service providers have formal and proven testing methodologies rather than heuristic or experiential techniques to identify, generate, and execute test cases. These formal methodologies provide for enhanced coverage and defect identification resulting in an improvement in product quality. Clients can benefit from working with outsourced testing companies by sharing best practices and investing in process improvement initiatives.
• Flexible Scale: The testing lifecycle is characterized by staffing peaks and troughs. Managing this variation of utilization becomes a challenge for in-house testing departments. This always results in either lower utilization (higher cost) or non availability of skilled resourced when required most. But in an outsourced product testing scenario, managing the ebb and flow of resources becomes the responsibility of the testing partner. Hence, outsourced product testing provides a much needed degree of flexibility to the client Organisation, and allows them to focus on product design and development activities.
• Independence and Insight: Good software development practice calls for separating the development team from the testing team. The primary purpose behind this separation is to provide an unbiased view of the product quality. In many cases, these checks and balances are compromised due to constraints like product release pressure, same team working for both development and testing, absence of any proper certification process, etc. Outsourced product testing brings a certain degree of independence, leading to greater visibility of product quality issues. This unbiased and independent insight helps the product management team to make more informed business decisions on product release schedule and product quality.

In a distributed development scenario, when product development is outsourced, an outsourced testing team becomes even more valuable. The outsourced test team serves as the certification authority, providing for an unbiased third view, which is independent from client's Organization and the outsourced development Organization. This evaluation is more objective as it is delivered independent of two reference points.

Conclusion

Outsourced Product Testing is not a new idea - current economic situation has made it more appropriate and attractive. Over a period of time, the process also has become mature and you have more offerings available from service providers. The current economy, customer's intolerance towards product quality issues, and new competitions are leading more product companies to adopt the outsourced product testing initiative. Outsourced testing service providers, who compete with one another and whose core business is to provide these services, have also made an investment to go up the value chain by developing reusable IP in the form of automated testing frameworks and employing the necessary skilled resources to serve customers and maintain their competitive edge. These service providers have become more efficient over a period of time, and offer services faster, better and more cost-effectively compared to an in-house function.

The current recessionary state is opening up a strategic option for leaders: free up scarce cash for deployment elsewhere to focus on core capabilities. We see a greater flexibility in offerings from outsourced test service providers, and an overall increased receptiveness to outsourcing in general by Organizations. Globalization (aka flattening of the world) has also resulted in product companies seeking new ways of doing business, learning new techniques, optimizing the software manufacturing process, and making funds available for global initiatives. This makes the business case for outsourced product testing more appealing as it enables organizations to free up both its cash and critical resources and have a partner care for its quality. Outsourced product testing offers a strategic option to ISVs to be prepared to scale new heights when market conditions improve.

About the Author

Somenath
is the Practice Manager for Product Engineering Services Practice of Blue Star Infotech Ltd.. Somenath has extensive experience in Outsourced Product Development Space and helped Tier 1 ISVs & Startups in setting up Offshore Product Engineering labs and Program Management Offices. He has been involved in managing multiple key strategic programs in the area of Mobile Communication, Digital Imaging and Product Engineering space. Somenath has special interest in areas like Strategic Management, Agile Development Methodologies,process improvements & Enterprise Mobility.

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