What to consider while Outsourcing

The first and foremost thing is to understand exactly What to consider while Outsourcing and why you need it. Outsourcing can benefit companies of all sizes, but particularly organizations making the transition from start up to fully fledged business.

When it’s done well outsourcing owners can save your business money and support growth, but it’s essentially that business owners understand the challenges and potential pit falls in order to get the most from outsourcing

Outsourcing can bring huge benefits to a company, but only when it is done right. The common misconception is that it’s all about handing over control to a stranger, but it doesn’t have to be this way. Instead it should be viewed as a strategic, cost-effective service provided by a close partner that gives your business more flexibility and the room to grow.

 

When should you outsource?

It is understandable that some companies will be nervous about entrusting part of their business to an external company. There are a number of reasons for this like

  •   Trust and loss of control
  •   Quality assurance
  •   Perceived vulnerability of relying on a supplier.

But discussing these concerns openly with potential suppliers will often be enough to reassure you.

A prospective outsourcer’s costing process and service presentation should provide reassurance and help you understand how and what parts of the process can and/or should be outsourced.

Key considerations

You need to have assurances in place to make sure any issues in the supplier’s process aren’t transferred to the end consumer. The system between the client and supplier have to be completely integrated in order to maintain the integrity of the delivery –both parties need to be able to identify, monitor and control the quality of deliverables.

When selecting an outsource partner, it’s not just about the supplier’s ability to do the job but also its ability to manage an escalation in increased volume; it’s important that the supplier has the ability to increase capacity if required. I would urge you to go and see the operation and check for yourself.

Benefits

Undoubtedly one of the single biggest benefits of outsourcing is being able to deliver software at much lower cost and better managed quality, another major benefit of outsourcing is managing resources through the peaks and troughs. Most manufacturers don’t have the luxury of having abundant capacity in there team, so the ability to change with demand and buy by the hour or as per requirement is a massive advantage when it comes to controlling costs. You’re also likely to get an optimum cost for doing the job, which should ultimately provide cost savings. Finally, above all else, it allows the organization that is outsourcing to concentrate on its core services.

Potential pitfalls of outsourcing

There are of course potential cons to outsourcing. As a potential outsourcer you’re going to have to work extremely hard to put together the most accurate invitation to tender. If you fail at that, you will fail all the way through. When you’re looking for a potential outsource partner you need to know what you’re buying. You have to know exactly what you need, as the pitfalls of ambiguity on invitations to tender are the prime reason for partnerships failing and indeed, are the biggest complaint amongst the outsourcing community.

The secret of successful partnerships

To develop closer relationships and work out mutually beneficial strategies, business owners need to openly discuss their plans for the future with suppliers, under a non-disclosure agreement if necessary. Ultimately if the outsourcing is very successful it may end up with the business having enough critical mass to take the operation back in house. This is not something to be afraid of talking about, as suppliers need to be well aware of their part in the development process and will often be happy to work on this basis.

Business owners and suppliers need to work harder at forging stronger relationship, as it’s only when close working partnerships are developed that the benefits of outsourcing are truly realized. Regular contact and transparency throughout the process is essential, as any small error could potential have high impact. As such it is important that your outsourcing partner has the software in place to enable you to do this. For example, implement a real-time reporting system to demonstrate capability for clients to keep 100% up to date with campaign activity.