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In spite of the controversy it tends to bring up, outsourcing has proven to be a life line for organizations struggling to remain competitive without sacrificing profits.
If your organization is considering outsourcing services, your success or failure will depend on making sure you manage the process itself. Knowing outsourcing pros and cons, can help you avoid making costly mistakes. Let’s take a look at five areas you should focus on to help make your outsourcing process is painless.
Tip # 1- Manage The Outsourcing Process BEFORE You Actually Meet With Potential Providers
The point before you even begin looking for an outsourcing provider is critical to the success of your outsourcing project. This is an excellent time to sit with others who may be involved in the decision making process of your organization. Discuss what your goals. Outsourcing statistics have shown that organizations who fail to make detailed plans end up losing a lot of money in the end.
Once you have your team in place, take a look at what area or areas of your business you want to outsource. For example, if you want to utilize Business Process Outsourcing to manage your Human Resources department. Or IT Outsourcing to handle software development. Whatever area you decide on, you should come up with a detailed outline of your project requirements.
It should answer key questions. What are your main issues? What do you expect the provider to do? Time frame? Budget?
You may end up with information that you previously had not thought about. Decide how much you want to hand over to the provider. You’ll need to make plans to protect privacy and other sensitive data. Discuss the possibility of either assigning a member of your team to oversee the process if they have experience doing so. Or hire a professional.
That brings us to our next tip.
Tip # 2 – Consider Hiring An Outsourcing Consultant
The advantages of hiring a professional to handle your outsourcing are numerous. But for our purposes we’ll focus on the most important reasons. An outsourcing consultant has the skills to negotiate terms that can be beneficial for you and your provider. He or she also has a great deal of knowledge about who the major players are within the outsourcing industry. You may not know much about potential vendors, but the consultant will.
It’s part of their business to know. They can weed out providers that may be unstable or have negative reputations. Plus depending on your needs, an outsourcing consultant can determine which provider would be best for your business.
Tip # 3 – Don’t Allow Potential Savings To Determine Which Provider You Will Hire
Organizations choose outsourcing to save money. But the reality is, you will not see your savings immediately. It can take at least a few years. In fact, your contract is likely to be 3 – 5 years. So if saving money is your only motivating factor, then you should reevaluate whether or not outsourcing is a good idea. You have to be open to looking at the big picture. Outsourcing can solve a multitude of issues beyond just saving money. It can allow you to control and manage an area of your business that is not your core focus. This way you can allocate other resources to the most important part of your business.
Tip # 4 – Interview A Potential Outsourcing Provider The Same As You Would Any Other Employee
Obviously, your interaction with the provider is going to be a lot more in depth. When you are preparing to hire a new employee to work for your company. You take time to interview them thoroughly. You ask several questions to determine if they will be a good fit for your organization. Background checks and reference checking is a part of the normal hiring process. You should use the same approach with a vendor. Ask lots of questions. Check them out. After all, you’re going to be committing to a multi-year contract. You don’t want to find out after you’ve signed your contract that there’s a major problem with the provider.
Tip # 5 – Think About Starting Out With A Smaller Project First
If this is your first time outsourcing, you may want to think about starting with a smaller project. Going smaller doesn’t mean you don’t have to follow the other tips we’ve suggested here. You should still follow the same steps. This is a good way to get your feet wet, if you have any nervousness about the process. It also allows you to learn from your mistakes. If something in the process causes problems on a much smaller scale, you’ll be able to avoid these same kinds of issues when contracting for a much bigger project.
Although outsourcing can be a viable way to keep costs down so you can devote more time to your core business. It can also become a disaster if you fail to prepare and manage your outsourcing project from start to finish.