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Outsourcing: worst nightmare or useful idea?

It's been called a telecomm manager's worst nightmare, but should outsourcing always be viewed as a threat? What about opportunity? Or both? Or neither?

Actually, it could be any of the above; it all depends on the individual situation. Members of the Tele-Communications Association say today's "threat" definition is easily understandable, but outsourcing is not new. Telcos have always done it and now other service providers make it possible to shift selected telecomm operations to outside vendors, mostly as a way to reduce costs.

But sometimes it's about an opportunity to provide better service at the same cost, or to service remote locations where full-time technical support staff may not be affordable.

If outsourcing must be used, the key to using it successfully, TCA members advise, is to keep control strategically. Those functions that contribute most to a company's core business and security are those to keep in house.

Functions that don't contribute to the core business and can clearly be defined as able to be provided by vendors at lower cost or better levels of service--such as pulling wire and cable, doing adds, moves and changes, and supporting desktop installations at remote sites--are among the best choices to consider for outsourcing.

Rather than spend time on those functions, in-house staff might better be involved in network design and duties that make full-time use of special skills.

Even if the applicable definition at this time is "neither," telecomm managers still should conduct frequent or ongoing analyses of department cost levels, service levels, organizational strengths and weaknesses and other vital performance data. This not only helps create and maintain a state-of-the-art system but also is especially valuable for convincing CFOs and CEOs that the department already is cost-effective, if and when they might want to take a look at outsourcing.

The analysis should develop a service plan and prepare an outsourcing document on costs that can be updated at least annually, and ideally should be shown to management before management asks for it. This will demonstrate that the telecomm manager is on top of the job and operating the department in the best interests of the company.

If possible, the plan also should tell how the department will increase its benefit to the company and what new technologies may be applied. The manager should keep in mind that some staff members and processes may be in the wrong places, and thus some jobs may have to be redefined and skills updated or outsourced.

It is extremely wise to let staff know if outsourcing is being considered, rather than trying to keep it secret, because if staff finds out the department could become paralyzed by worries about job change or loss.

TCA members were urged to establish their telecomm department's bench-marks of costs and services and join with a TCA benchmark task force by developing formulas that enable efficiency comparisons with other companies.

Marty Hill of Boeing is spearheading the benchmark project. He has been bench-marking with other companies for quite some time, and the task force is his idea.

The task force is self-funded by the companies that participate. It's developing a special form on which companies can provide comparative data.

The benchmark project will enable a telecomm department to:

compare itself against others

compare itself against itself over time, and

benchmark what the department currently is doing against what it could be doing, considering possible alternatives.
COPYRIGHT 1993 Nelson Publishing
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Morken, Cal
Publication:Communications News
Date:Feb 1, 1993
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