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8 Smart Tips for Evaluating Your Outsourcing Partner

business.com editorial staff
business.com editorial staff

When outsourcing any part of your production process, following these eight steps will help you pick the right company.

  • There are a number of benefits, including cost reduction and higher quality, to selecting an outsourcing partner for your business.
  • Many partners bring a wealth of knowledge and experience to deliver complex work. This leads to a higher rate of production over a shorter period of time.
  • It is important that you select the right partner for your needs at the right time with an understanding that they can change. 

You've already done the math and found out that the savings and efficiency of outsourcing far outweigh the control or communication issues that might go with it.

What are the benefits of having an outsourcing partner?

There are many benefits to have the right outsourcing partner. 

According to FlatWorld Solutions, one of the top benefits of having the right partner is the ability to complete the job for less cost and higher quality. The same work can be accomplished in another country for a small amount of the cost in the U.S.

Many partners bring a wealth of knowledge and experience to delivering complex work. This leads to a higher rate of production over a shorter period of time. When you outsource some of your work, it gives you the opportunity to focus your energy in areas that can better serve your business, such as marketing or research. When you outsource, you also eliminate the need for infrastructure, and you are able to invest your money in other places. You are also able to spend less energy and money on training needs since the outsourced resources already have the necessary knowledge and training.

So you decide to go ahead with your outsourcing plans. The next step is choosing your outsourcing partner. It goes without saying that you should choose the best one so your company can achieve optimum results.

Tips for choosing an outsourcing provider 

When evaluating your outsourcing partner, your main focus has to be the ability of the vendor to meet your requirements. Below are some of the criteria you should consider.

1. Establish industry experience.

A target outsourcing company's deep knowledge of and experience in your industry qualify it to handle the tasks and processes you plan to outsource. To gauge how much experience an outsourcing vendor has, you could ask the company how many projects it has completed and how intensive those projects were.

The management team, project managers and other team members who will be working with you should likewise display outstanding qualifications and extensive experience in implementing your business projects.

2. Assess technical expertise.

Your future outsourcing service provider should be able to explain to you the methodology it uses to manage its projects, track results and resolve issues so that you understand how your own projects will be handled.

Ideally, your outsourcing partner should be accredited in critical areas such as project management and quality control. Meanwhile, having a business continuity plan in place will ensure it can deliver uninterrupted services or support to your company.

3. Ask for client references and samples.

Knowing the background of your prospective outsourcing partner can give you a better understanding of what the vendor can offer its customers. Request feedback from past and present clients regarding the scope and quality of services they received, as well as any challenges they experienced in the partnership.

Alternatively, you could refer to any case studies found on the company's website to familiarize yourself with the ins and outs of the company. If applicable, ask for work samples from completed projects or marketing prototypes to give you an idea of the kind of output you'll receive once you sign the service contract.

4. Inspect communication and client management systems.

To facilitate communication with your partner, discuss your expectations so that everyone on the outsourcing team is available by email, phone, or other messaging applications or software at the designated times.

If you're operating in a different time zone, your outsourcing vendor must make sure that both of your working hours meet to a certain degree to minimize gaps in communication.

You also need to agree on a single point of contact for all your queries, feedback or concerns to have a smooth exchange of information between you and your outsourcing team.

5. Check infrastructure and technologies.

A technologically ready service provider is in a better position to support your company's needs and demands. The IT infrastructure of your outsourcing partner should include the latest hardware and software components, a reliable network of phone and internet lines, and integration with your own technology.

Your vendor may also have to invest in acquiring and applying other technologies specific to your business.

6. Calculate costs.

Fixed project costs can give you huge savings, so as much as possible, ask your potential partner if this option is available. Otherwise, it's your responsibility to look into and question any hidden costs in project implementation, staff training and the like that might add unnecessary expenses to your operations.

7. Evaluate the workforce.

The success of your outsourced company will largely depend on the workforce and other factors with your outsourcing team. That said, you could review your vendor's hiring policies and processes to help you highlight the knowledge, discipline, and technical and soft skills your business requires.

It might also be healthy for your company if your partner understands your corporate culture, including your values, beliefs, vision or mission statement, and medium of communication, and adopt it in the outsourcing environment.

8. 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.

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