Becoming an Agile Organization Through Outsourcing

An agile organization is a company that can execute strategy faster, with the ability to adapt to changing market conditions.  Like mountains, agile organizations change, but withstand the test of time.  The new business environment, which is marked with unpredictability, will favor more agile organizations.  In 2010, it will become increasing important for companies to operate using an agile workforce model, which is a core feature of the Excel SoftSource outsourcing offering.

Excel SoftSources is prepared to help companies become more agile and gain a competitive edge.

Excel strives to operate as an agile organization.  By partnering with Excel, we can help customers also become agile.

What exactly is an agile organization?  An agile organization is founded in four main principles:

1. Nimble and elastic workforce that can adapt to volatile market conditions
2. De-centralized organization structure with an emphasis on the virtual organization
3. Distinctive capabilities and knowledge capital
4. Improved collaboration through communication and cross-pollination of teams

Nimble and Elastic Workforce

In an uncertain economy, it is ever-increasing important for companies to maintain a nimble and elastic workforce.  How can this be achieved?  Much like gaining a new customer, hiring a new employee is much more expensive than re-training or re-tooling existing employees.  The least desireable circumstance is to hire employees, experience an economic downturn, then lay-off employees.  Then, when the economy repairs itself, to go to the labor market and recruit new employees all over again.

This is the exact condition of many human resource departments today.  The economy will recover.  The business strategy will call for increased staff.  The companies will need to hire and re-train new employees.

There is an alternative - outsourcing.   How can outsourcing help an organization achieve agility?  Well, the first and most important concept to understand is that companies need to maintain a core in-house team.  This core-team is small and highly talented and does not change with the market tide.  The outsourcing provider then builds a complimentary near-shore team that has an agile workforce model.  Agile workforce models stress deeper benches, lower direct costs and diverse hard and soft skill-sets that can be moved from project stream to project stream or task to task, with little or no re-training and  no negative impact to the customers overall business strategy.

The figure above shows a common staffing curve for a small, but rapidly growing startup.  In this case, the enterprise is growing at about 50% per year.  Using a traditional staffing model, which tends to react to short-term staffing needs, this company is both understaffed and overstaffed, depending on the quarter.  Using the Agile Workforce Model, this company is always overstaffed by a pre-determined percentage, which is part of the long-term growth strategy, and never understaffed.  This provides the following benefits to this small start-up:

• The ability to quickly ramp-up and ramp-down projects, without hiring frenzies or layoffs.
• The ability to change course in overall strategy due to a deeper bench of resources.
• Equivalent direct labor costs, however, no lost opportunity costs when projects are cancelled or not started due to staffing deficiencies

Excel SoftSources can help you develop an agile workforce that is both nimble and elastic.

De-Centralized and Virtual

The bureaucratic or top-heavy organization - and - the bottom-heavy organization models are favorable during unpredictable market conditions.  Why?  Each organization model does not adapt well when the market changes.  Top-heavy organizations become too political and stifle innovation.  Bottom-heavy organizations contain redundancies and are not able to achieve cost-effective production.

Agile organizations are balanced in the middle ground.

Excel SoftSources stresses an agile workforce model that provides for rapid expansion during times of growth and incremental contraction during periods of stagnation.  In either situation, the goal is to maximize business performance and reduce costs.

Today, the economy is global.  As frontiers and trade barriers are reduced, even small startups can establish global agile workforce models.  In this model, the executive management team, the business team, the development team and the quality assurance team have virtual geographic boundaries, but are still bonded by strong communication, collaboration which are easily enabled using modern technology and bandwidth.

 Excel SoftSources enables virtual and global growth that is agile and cost effective.

 Distinctive Capabilities and Knowledge Capital

While many off-shore providers work in a vacuum, where knowledge capital gets lost or is degraded, Excel SoftSources stresses building knowledge capital and collaboration with the customer.  The private Knowledgebase is a central feature that we provide to customers.  This not only enables collaboration and communication between on-shore and near-shore teams, but also allows customers to communicate with each other.  Excel stresses making decisions based upon practical experience, as opposed to, opinion or speculation.

Excel SoftSources engages customers with a focus on knowledge capital creation and collaboration.

Collaboration, Communication and Cross-Pollination

Our outsourcing location, Costa Rica, is a main enabler for Collaboration, Communication and Cross-Pollination.  Excel hires staff with strong soft-skills which makes this possible.  We have customers that regularly fly to the development center for checkpoints, to conduct interviews or generally mix with the team.  We regularly sponsor team outings where clients are invited to join the development team to achieve an uncommon mixing of on-shore and near-shore teams.

Excel SoftSources stresses soft-skills that enable better communication and overall productivity.