Outsourcing brings in countless advantages – from managerial freedom to more profits. Many an enterprise has accumulated enough experience to maximize the benefits of outsourcing. Yet, a major chunk of businesses that are outsourcing, is still far from gaining the efficiency, profit-making and cost-saving levels they aim for.
Here are a few suggestions to make an outsourcing contract highly successful:
This is probably the most important decision you will take when outsourcing. There are many models and you need to examine various factors when deciding on one. Takers of cloud company model of outsourcing are consistently increasing as it allows enterprises to hire employees in the cloud and monitor them directly, while the service provider takes care of administration, payroll, IT support and other heads.
You and outsourcing service provider must use the measurements for success. On your part, you must provide the outsourcer with clear instructions to act on. Integration of the systems and seamless communication will facilitate work of at par quality.
A carefully crafted SLA (service level agreement) will help in keeping any future differences at bay. The SLA frames the boundaries in several areas such as standard for measuring services, volume of work that will be delivered, quality of deliverables, criteria for responsiveness, and procedure to follow if something goes wrong. SLAs tend to get convoluted, so this must be avoided.
Senior-level management at the outsourcer as well as the client company must work in close collaboration to meet the objectives. Periodic meetings to review business needs and the work done will help in keeping any outstanding operational issues together. No outsourcer would have intimate business knowledge about your own operations and it will take some time before proper understanding develops.
Multi-sourcing doesn’t really work, particularly if you are an SME (small and medium enterprises). Coordinating with different organizations handling various tasks on your behalf often becomes problematic. Outsourcing business processes to a single service provider capable of handling a range of jobs is a better option, and it will provide you better value for your money.
If you haven’t outsourced before and want to gain some experience before scaling up the work, spend some time in identifying tasks that you are pretty comfortable sending to the service provider. Monitoring the quality of the work assigned will help you gauge the quality of work they can be expected to provide.
Make sure your expectations from the outsourcing are realistic. If you are able to save 15 to 30% on your costs, you must consider the contract to be successful. However, it is not the only criteria for success. You also need to factor in the quality of work, lessons learned and other hidden advantages before taking a call in this regard.
You need to look at outsourcing as a long-term investment. As the collaboration matures and the executives with the outsourcer acclimate to the new business processes, the quality of work will improve and the costs will decline further. Benefits of well-managed outsourcing strategy accrue with time and a careful ROI (return on investment) at pre-determined intervals will reflect it.