Entrepreneurs around the world all want the same thing. They want to get more bang for their bucks on all of their investments. Outsourcing is a great investment which allows you to maximize every dollar you spend, but it still needs to be managed effectively. Here are some tips to manage the outsourcing process.
1. How Do You Define Success?
In order for your cooperation to be successful you both need to come together and define “What is Success.” By being on the same page, you can determine whether your goals are feasible, what resources you need as well as the timeframes. Be as transparent as possible with your vendors. This will avoid any confusion about scheduling requirements and project costs.
2. Evaluate the Outsourcing Company Like You Would when Hiring a Full-Time Worker
Just like you would grill a prospective employee during an interview, be sure to do the same with the service provider. Follow the same procedure as you would when hiring a regular employee. This means checking out their references, researching their past conduct and engaging them in a dialogue if you have any concerns. If you’re worried about something, don’t just sit back and hope for the best. Ask the service provider for more information to put your mind at ease.
3. Look for Matching Experience
If you were to interview a prospective candidate to fill a vacancy, one of the first things you would ask them is whether or not they have experience in the field you are operating in. The service provider you are considering to hire is no different. If your company operates in the financial industry, ask the service provider if they have ever cooperated with a financial company and which specific results they were able to achieve. Don’t be somebody’s test guinea pig. Look for companies with proven results.
4. The Price Tag Should Not be the Deciding Factor
The retail saying “You get what you pay for” applies with outsourcing as well. If you hire a company simply because they are the cheapest, don’t expect “Wow” results. The same goes for hiring the most expensive service. Just because they are the most expensive, doesn’t mean that they are the best. Experts recommend that you automatically discard the highest and the lowest bidding price. When evaluating tenders, you want to look for a good value and quality results.
5. Ask for the Portfolio
In order to make sure that the company’s service meets your expectations, ask to see their portfolio. This will be the solutions they offered to their clients in the past and what specifically they helped their clients achieve. You can even ask for a rough outline of how they plan to accomplish your specific project. However, be careful. There is a fine line between asking for the skeleton of a project and the finished project “on spec.” Nobody will work for free, so make sure that your expectations are reasonable.
6. Test the Waters
If you are beginning to work with a service provider for the first time, start off with a small project. This will give you an opportunity to see how the company operates, how the handle workloads and how they treat you as a client. If all things go well, you can confidently increase the scope of the project, or add new ones. But to safeguard your interests, initially start out small.
7. Don’t Forget About Benchmarking
Every project has specific goals or benchmarks that must be achieved on the way towards completion. It is a good idea to tie payment towards the achievement of those benchmarks. This will motivate the service provider to work harder to achieve tangible results and it will show you what exactly you are paying for. Experts recommend paying somewhere between 20-30% of the total project cost up front and dispersing the rest of the payment when the benchmarks have been reached.
8. Negotiate Project Ownerships From the Get Go
Even though you are ordering a particular service, but the contracting company is actually fulfilling this service, this could create a conflict regarding ownership of the completed work. This is especially important if your project has some highly specific requirements, such as software development or research. Be sure to specify that all content and work belong to you and you possess exclusive rights to its exploitation.
9. Make Sure the Service Provider is in it for the Long Haul
After the final deadline has passed, make sure that the service provider will stand by their work and offer service guarantees. This should be negotiated even before the work on the project has begun. All though it’s not always possible to foresee problems down the road, always try to negotiate at least some sort of warranty or guarantee for the work, no matter how big or small.
10. If it’s not in writing, it doesn’t exist
Over the course of the project, there will undoubtedly be some changes. When these changes arise, be sure to get the approval from the other party in writing. This will save a lot of confusion and time in the long run. In addition to this, be sure to save any correspondence connected with these changes such as e-mails and text messages. Not only can they be useful when a dispute arises between you and the service provider, but it will definitely be useful if you go to arbitration.