How to make the right decision in selecting an outsourcing/offshoring partner

Both big and small companies resort to outsourcing their business functions. Either they choose to outsource most of their functions or just a handful of them so that they can focus on core business aspects.

In both cases, they need to take into consideration some key factors, which will ultimately help them take the informed decision. Let’s take a look at some of the factors to consider for taking outsourcing decisions for your business.

Understand Your Business’s Needs

Before diving into the pool of potential companies, you must have a clear understanding of the capabilities of your own service team, and the areas in which they require support. These matters may dictate the outsourcing group best suited to your needs.

Communication and Making the Decision

As with any effective business relationship, successful  outsourcing requires communication. Speak with your current in-house  team to get a sense of their capabilities and what they require in outsourced work.

Cost Savings

When you talk in pure business terms, outsourcing needs to improve your business bottom lines through reduced operational costs. If you don’t see this happening anywhere in the near future, chances are that you’ll end up spending more than you end up saving.

You don’t need to be an expert analyst to figure out where you’re heading. All you’ve to see is whether outsourcing will help you reduce a significant amount of your capital in hiring employees and equipment. At the same time, you will also need to maintain a balance between the quality and quantity of the services provided by the outsourced employees/firm.

For instance, if you outsource accounting, you need to see if carrying out this function is taking up more resources and costs as compared to outsourcing it.

The Ability To Meet Deadlines

Timeliness in outsourcing is as important as the costs. That alone will nullify any cost-saving benefits that you had anticipated while hiring them.

You need to ensure that the vendor adheres to the promised quality and timeliness. One of the ways to do this is by making all your queries beforehand.

If you find that the vendor has little quality control measures or does not have any backup plan should they miss a deadline, it is better not to hire them in the first place.

The Service Level Agreement

The Service Level Agreement is one of the most crucial documents when we talk about outsourcing partnerships. At the time of creating the document, make it a point to ensure that every single detail is written clearly.

This will help you avoid any kind of confusion or ambiguity especially about the quality of the services you’ll be getting. It also makes sense to hire a lawyer especially to manage your outsourcing endeavour so that you don’t end up in any legal trouble.

Efficient and Effective Communication

We all know that business requires effective and efficient communication and coordination. If your outsourcing partner is at a location far away, communication can be difficult. You need to assess the service provider’s communication facilities and capabilities to ensure that constant contact with the vendor is possible.

Gauge financial stability.

When you are choosing a partner, you want to make sure the company is stable and can be solvent in the long term. You want to make sure that this company is going to be available for as long as you need them to be an outsourcing partner.

Following the tips in this guide, you can find the best onshore, nearshore or offshore outsourcing partner that meets your requirements and suits your organization well.