Global corporations have for long set up their own captive offshore front office operations, back office transaction processing units and shared services centers for cost advantage, access to skills and process efficiency. It’s often possible that the parent organization needs to divest its captive to a third party outsourcing partner. Reasons for this could include lack of scale, management effort overhead, changed priorities, new determinations of focus, etc. Third party providers are very experienced in migrating new business units with established, mature transition approaches that have evolved with experience over time. But the acquisition of a captive business always requires a well customized strategy that includes a seamless transition plan to ensure uninterrupted service delivery.

The approach to divesting/acquiring a captive operation usually goes through a few key milestones. A thorough planning process starts right from your partner short-listing stage. There is no substitute for allowing business process outsourcing candidates to invest time in proper discussions to understand the full scope of your operations. It’s particularly important for your senior leadership to set objectives for everybody concerned. This eliminates ambiguities and unnecessary interpretations and helps your potential partners to take the right decisions and actions.

It is imperative for your provider to understand your business thoroughly. It’s best to be comprehensive and open about your captive’s cost structure and equally transparent about your business practices. A less than transparent approach may prevent a provider from accurately sizing the opportunities for cost reductions and inherent constraints to optimizing their costs except perhaps in big ticket items like salary, infrastructure, transportation, welfare, and other costs like outstanding loans, leave balance, etc. It is therefore important to provide your future partner clear visibility to the “bill of materials”, the current set of deliverables, the way they are measured and the reports that are generated. The frequencies you have set for different reports indicate priority areas and a good partner will want to pay adequate attention to that, including the glossary of terms and key definitions.

Work with your partner to develop a meticulous checklist on all human resource aspects encompassing details like organizational charts, spans of control, appraisal records and attrition prone teams. However, the success of the upcoming transition hinges on a comprehensive and well calibrated communication plan. The plan must comprise of details that list timing and content for communicating to senior management, FAQ briefings with HR teams and town halls to address the rest of the organization. Making HR a part of the communication plan ensures that there is a go-to team that drives consistency when employees approach the department. Generate a ready list of Q&A to manage anticipated issues to help the HR team convey messages with confidence.

Technology shifts must form a part of the planning process. Get the IT, operations and transition teams together early to achieve a smooth transition. This is required specially when decisions pertaining to upgrades, development, AMC and likely redundancies need proactive attention. The transition plan must cover clear ownership of all jigsaw pieces to ensure that all aspects of technology come together and function seamlessly to support the business upon relocation.

Then comes the moment of truth. Business sponsors and key decision makers now need to take that leap of faith and decide the actual moment of “switch over”. Here your partner plays a crucial role in providing the necessary confidence in its agility and stability. At Minacs, our teams have demonstrated that managing transport shifts, pre-planned user acceptance tests (UATs), and getting smaller teams to operate from new premises in advance can result in large teams moving house without as much as a decimal point’s dilution in service levels or impacting any other metrics of service delivery.

While the achievements of a captive transition accrue over a relatively longer time frame, sharing a list of your goals for the first three months creates a sense of purpose and more early-wins for teams on both sides. From my experience, a partner’s dexterity in the early days can be gauged through a “cross-training index” which helps it identify skills at an individual level so that its ability to deploy resources in a multi-tasking environment or multi-queue environment becomes easier. This could result in up to a 45% improvement in productivity and/or a corresponding decrease in headcount, very quickly.

Divesting an organic part of your organization to a third party changes your “ownership” status to that of a “client”. There is no harm in that but requires some important changes in approach and mindset. By detailed planning, sharing key goals, executing with finesse, consistent and proactive communication, regular monitoring, reviews and measurement, you can enable your outsourcing provider to help meet your business objectives and exceed them. With a spirit of true partnership, a competent partner can indeed propel your vision and free up your team to focus on your core strengths.