Outsourcing your Research & Knowledge Functions
Research Outsourcing Need-Assessment Process
Outsourcing has emerged as a common approach to cutting down internal costs and driving core business growth by delegating non-core organizational activities to external partners who can handle them more effectively and efficiently. However, despite it’s proven ability to lower costs and streamline internal processes, a large number of companies remain hesitant of outsourcing as an alternative to doing things themselves.
According to Infomineo, among the main reasons why companies are reluctant to delegate non-core activities to external partners is because of their uncertainty of which tasks are best outsourced and because they are uncomfortable with the change it may cause on existing work processes. When taking a look at the case of outsourcing research and knowledge activities, companies also fear that the quality of work conducted by outsourcing partners would not be at par with local work.
Before outsourcing research and knowledge capabilities, organizations need to start off by considering their internal environment and how an outsourcing partner would fit in. Organizations should also take note of the risks that might be faced and how they can be avoided by finding the best-fit research provider and establishing a well-organized outsourcing implementation process.
A. Consider your organizational setting and assess the potential of an outsourcing relationship.
An internal assessment of the creation, retainment or outsourcing of research capabilities is a key step in the decision process. As an organization, you will have to evaluate the position of research as part of your activities to decide whether it is a key element that ought to be realized in-house or if creating a long-term relationship with a research provider would provide higher benefits for the organization.
B. Assess the level of risk that would be created through outsourcing research capabilities.
The second factor to consider in the decision-making process is whether there would be a risk in establishing a relationship with a research provider for your organization. Your organization would have to evaluate the degree of control that it would be ready to hand over to an external partner and how it affects internal knowledge. Factors to take into consideration are the level of sensitivity of the information that the outsourcing provider would be exposed to and the level of involvement your organization would want to have with the outsourcing activities.
C. Evaluate the outsourcing implementation process and assess its alignment with your organization’s goals and objectives.
To establish an effective relationship with a research provider, your organization should make sure the outsourcing process aligns with its existing long-term goals and objectives. The assessment takes into consideration the level of importance research has within your organization.
A strong part of establishing an effective implementation process includes addressing the type of relationship you wish to have with your outsourcing partner (long-term, short-term, dedicated, or need-based) and establishing effective methods to monitor the provider’s activity and assess their performance relative to your organizations set standards.
D. Evaluate the outsourcing provider’s fit towards your organization’s research needs.
Defining the goals you would like to achieve through an outsourcing relationship and listing the key challenges your organization fears to face will provide you with a criterion to evaluate outsourcing partners available on the market. Your evaluation will be based on how well-equipped the outsourcing partner is with addressing, managing and closing your gaps of concern.
Questions to be considered
- Is research a part of my organization’s core competencies or peripheral activities?
- Do we have an in-house research expertise?
- If yes, do we have enough workload to develop or expand the existing research capability?
- If no, how much would it cost to create one?
- Does my organization need access to research on a short-term or long-term scheme?
- Is outsourcing cost-effective compared to in-house research services?
- Does loss of control through outsourcing affect the organization?
- Do internal stakeholders need to be part of the research process or are they result driven?
- Is it personal or sensitive data that is subject to legal protections?
- What is the reputational risk if there is some sort of breach?
- What are the business consequences if the services have an unexpected interruption?
- Can the goals for the outsourcing relationship clearly be defined?
- Are the goals for outsourcing in line with your organization’s long-term goal?
- Can the outcome of the relationship be objectively measured?
- How would my organization be impacted if the goals and objectives of the relationship are not achieved?
- Has your organization had previous relationships with the provider?
- Does the provider procure added value to your organization?
- Does the provider have access to the right research databases and tools?
- Does the provider have access to the right knowledge and expertise?
- Is the provider working across the industries and regions that relate to my research needs?