Outsourcing services to a third party provider has been proven strategy for businesses to survive, and even profit during a turbulent economy. Proof of this is the continued uptrend in global outsourcing beginning the year 2000. The last 15 years of the world’s history has seen turmoil at an unprecedented stage.
Wars, global recessions, collapse in equity markets, bankruptcies, massive unemployment and changes in political structures have made business become more unpredictable. Outsourcing gives businesses the best option to adapt mobility and flexibility in their strategy design.
But despite the continued growth of the global outsourcing industry, there have been instances where the arrangement did not benefit either party. Like other methodologies, you have your fair share of detractors of outsourcing services. And while they have valid points, rather than getting sold on them, you should learn from their experience.
If you want to adopt a successful and profitable business model, you should first build a solid foundation for it.
Here is how you establish an effective outsourcing model for your business.
Research on Outsourcing
The biggest mistake clients make is not undertaking the required amount of research on outsourcing. You should learn everything that you can about outsourcing. Go beyond the Internet and talk to qualified resource people and those who have previous experience, both good and bad. Prepare market studies and financial studies and use these as immediate references.
Identify the Tasks You Need Outsourced
Review your current business model and create a summary or matrix on all the tasks that are involved. Categorize the tasks to essential and non-essential. Determine the number of hours in a day you will need to manage the essential tasks. The non- essential tasks should be your outsourced services.
Assess Your Level of Commitment
What will be your level of involvement when you outsource services? This is an important question especially for the first 2 quarters of the arrangement. You have to spend some time with the service provider to make sure the quality of deliverables is consistent with your standards. It may not seem like you have more time for the essential tasks but it will be time well spent to get the working engagement right.
Find Your 3rd Party Services Provider
As big as outsourcing has gotten, there are many 3rd party services providers in the market. You have to be careful when choosing your outsourcing partner. Here are some tips to consider:
- Conduct due diligence
- Get referrals or recommendations
- Create a short list of 5 prospective service providers
- Ask for references and endorsements to contact them
- Subject the candidates to interviews and testing
Set the Guidelines and Expectations
Once you’ve found your outsourcing services provider, discuss the work guidelines and share expectations. Outsourcing is perpetually a work in progress; it should only get better. Outsourcing is effective but it is not a cure-all. There will be problems but as with all relationships, both parties should work toward resolving them.
Outsourcing services will continue to become a relevant strategy over the next few years. Your business will greatly benefit from it but you have to set the foundations for its success.