Outsourcing Checklist I: Finding a Provider Apr 16, 2019
Outsourcing is now a permanent feature of business life.
Organisations have used outsourcing to make dramatic savings, let go of expensive assets and built capacity to grow exponentially in a way that would not have been possible with only in-house resources.
All businesses – no matter how small – can now access providers that allow them to outsource tasks and processes that are too expensive to handle in-house or require a specialized level of expertise.
Your business wants to become one of the successes, and of course avoid the cost and frustration of a failed outsourcing program.
To begin or increase your outsourcing, take some time to set the stage for a successful outsourcing relationship. Here is a checklist of tasks that will help you prepare to outsource:
Before you can effectively prepare to outsource, define the tasks you want to outsource and think about the impact it will have on your business. Here are the key questions:
- What is the business basis for the proposal?
- Has the decision been fully documented, and will the business justification stand up to scrutiny?
- Has there been buy-in from management and the Board?
- Are jobs going to be eliminated and replaced?
- Which employees which be impacted?
- What is the timeframe?
- Will the outsourcing be permanent?
- How will you communicate the outsourcing proposal with the team?
- Is there a designated person/team responsible for the outsourced resources?
2. Find and learn more about providers
Your next step is to find outsourcing companies and do some research to find different providers and vendors you could potentially choose from.
You’ll need to ask several questions or find answers to them online to accurately judge your potential outsourcing providers.
- How long has the company been in business?
- How is the company reviewed online?
- What features or capabilities does the provider offer?
- What processes and tools do they use?
- What about security and compliance?
- What is the reporting process?
Once you have your short list of potential providers, the first point of discussion or clarification should be price.
3. Determine the cost
- Contact the provider to learn more about pricing – fine print, etc.
- If choosing a customized plan, determine and agree on pricing
- Find out the payment schedule
- Ask about associated contracts, agreements, or requirements
- Does the company offer flexibility, or is it strict with its plan and package options?
4. Get to the nitty gritty
Conduct a more in-depth assessment to get an idea of size and structure, skills and technologies as well as scalability.
- how many employees do they have access to
- what technologies do they offer
- what additional services and skills are offered
- are any subcontractors used?
- What is the process for scaling teams up?
- What happens when an employee leaves?
- What is their hiring process?
- How do the staff keep up with trends and professional education?
5. Choose your outsourcing provider
Now that you’ve collected all the relevant information you can choose the right provider. After selecting the provider you’re most comfortable with, take the following steps to get started working with your outsourcing provider.
- Which provider offered the best pricing in combination with features?
- Did one provider show exemplary customer service or indicators of good performance?
- Do any of the providers’ terms sound like red flags?
In our next blog, we will lookout how to work with your outsourcing company; both starting and maintaining a good relationship and growing together; as well as considering challenge that may arise.
If you’re thinking about outsourcing but aren’t sure where to start, give SBA Legal a call. We can look at your business needs and offer a turnkey solution that may include individual, teams and onshore and offshore resources.