Outsourcing is an unfamiliar terrain for many business owners and managers. It will be difficult for them to navigate successfully on their first foray. But, the presence of a reliable service provider - whether it's an offshore or onshore company - by their side gives them the comfort and support that they need to make outsourcing work for them.
Choosing the right partner is a key factor in ensuring your success. Here are some tips to help you choose wisely.
1. Choose your prospect partner the same way you hire your employees.
Naturally, you'll be curious to know how effective an outsourcing provider can be and whether they really know what they're doing or not. Ask for a corporate fact sheet with pertinent information about the size of the company, the niches they serve, the companies they've done business with, and the current services they're providing along with the corresponding rates. You'll also need to see a reference sheet that feature some success stories from past and current clients.
Ask for recommendations from your friends or business colleagues. Outsourcing has become the norm for many companies these days. You probably know someone who knows somebody who's done it. It may be the best thing that ever happened to your friend or it may not. The information you glean from someone you trust is far more reliable than the news reports you hear or read about outsourcing.
2. Check out the communication and IT infrastructure of your prospect partner.
When you outsource, you'll be heavily dependent on a stable internet connection. Choose a partner that has well-furnished work facilities, updated technologies, and access to supporting third-party providers and government agencies.
Don't hesitate to ask questions about the security of your prospect's workplace and their data management practices. Ask about the reliability of the internet connection, and the kinds of software and hardware the company uses. Better yet, ask for pictures -- these provide proof that the company you're dealing with has a physical address and it's equipped to serve your interests.
3. Consider the country where your offshore outsourcing partner is located.
Don't just think about which country can give you the lowest rates in taxes and labor costs. Consider also the country's environmental, political, social and economic health when you're formulating your outsourcing strategy. Countries with a booming outsourcing industry usually have public policies in place that make it easy for foreign companies to do business with local firms.
Think about the legal protections and labor laws are in place. They greatly vary from country to country. Educate yourself on the laws specific to your outsourcing initiative. Comply with regulations and you won't have to worry about legal issues.
4. Cultural compatibility is just as important as location.
Cultural differences can significantly affect your outsourcing partnership, not to mention the job performance and working relationship of your employees. Outsource to countries with a more hybrid culture that combines the best of what the East and West have to offer. Then, see if your provider's corporate culture intersects with your own.
Communications styles may have similarities among employees of the same age, gender, and rank. But, it may veer from the norm when it's between subordinates and their bosses, or people of different demographics. Asians tend to address people who are older in a formal manner and speak informally with those in their age groups. There's also a difference in attitudes towards co-workers of the opposite gender or of a different social class.
There are two ways you can avoid cultural conflicts:
Cultural awareness involves conducting workshops and sessions both offshore and offshore to make both sides aware of each other's cultural practices.
Culturally compatible resource deployment involves having local, native onsite persons manage the onshore client relationship or even having a culturally compatible offshore workforce.
5. Calculate the size of your outsourcing needs.
Big outsourcing companies can provide you with the best-of-breed technologies and streamlined workflows that ensure you receive only quality uninterrupted services. If you're looking to outsource routine work with volume-based metrics, then selecting a large service provider makes sense.
But, when you'd rather retain control over your operational costs and enjoy some flexibility in your outsourcing strategy, then go for a smaller firm with small quality-controlled facilities. Costs are better distributed to areas of your operation that need greater attention and to business activities that will return a higher ROI.
Secondly, if your requirement is niche which can be met only by an industry/domain specialist, then you should opt for smaller specialised provider who will have greater experience in delivering services you need, and will innovate at a much faster pace to deliver best-in-class specialised services. Overall, the need for smaller and specialised vendors delivering custom work is there and is likely to grow even further in future.
Outsourcing can be challenging when you have little or no knowledge about it, or you've been burned in the past. But, partnering with an outsourcing service provider can help you mitigate the risks and develop best practices for the work you outsource. Your outsourcing partner can also help improve the delivery of your services, lower your costs, and redirect the attention of your core management to activities that bring value to your business.