Here’s How To Get Outsourcing Right First Time

Outsourcing often gets a bad rap but it shouldn’t. More businesses should look into a practice that can help them focus on core competencies and improve customer experience. Outsourcing can be done badly, there’s no doubt about that but it can also be done well. Here’s how.

  1. Be clear on the type of outsourcing you’re doing

Is it strategic with broad responsibility for operational processes? Is it transactional in being limited to a narrow, repeatable set of tasks? There are many different reasons why you would outsource and many contrasting types you might want to adopt such a strategy. You might be a telecommunications company that sees cost reduction opportunities in handing billing to another supplier. That supplier might have better expertise in the field and may be better equipped to handle a set of processes that drain your resources and energy.

2. Know your arguments for outsourcing

You might outsource to take advantage of external technology or expertise. It might be to improve process agility and re-engineering. Cost reduction is another reason you might want to proceed. A good outsource argument has more than one business case reason. Avoid going to the board with an outsource argument that is based on cost reduction alone. That will push behaviour to find a partner that is all about cost reduction. That can often mean cutting corners and short changing customers.

3. Check the impact, know the risks

Review your plans with others across the business. Work with procurements and other teams to identify interdependencies or any issues that might crop up. Spend time researching the do’s and don’ts of your particular use case for outsourcing. You might want to speak to other companies who have gone down this path.

4. Conduct a rigorous RFI and RFP process

For the sake of due diligence do an RFI first regardless of whether you think you know what you want. Requirements often change dramatically during implementation so it’s worth using an RFI to explore your requirements and fundamentally to weed out weak and unsuitable partners.

Once you’ve done your RFI conduct your RFP. Be willing to share information that helps those competing for the business. Give feedback and audit everything you do. You’ll need to share reasons for a ‘No’ with any unsuccessful partner so don’t get caught napping.

5. Grade RFP participants on their historical performance

Ask to speak to a potential partner’s current client base. Ask to see their internal success metrics. It will give you a good idea of how well they are likely to perform. Always, always check the media for stories that might give you reason to second guess a choice. You’ll be surprised the amount of clients who do this only after a contract has been signed.

6. Stay close to your outsource partner

If it’s a strategic relationship you’ll no doubt be closer to their operation that if it is a transactional relationship. Be careful that you don’t take your eye off the ball with the latter. Companies often outsource transactional activities that are business critical but have weak oversight in place. Oversight gives you the chance to ensure your business isn’t blindsided by a PR hurricane.

7. Incentive positive behaviour and penalise negative (…maybe economically).

Build in incentives for good behaviour into any partnership agreement. Also be transparent about what penalties might be involved if the partner breaks any Service Level Agreements or delivers poor service to your customers.

8. Train outsource partners to deliver ‘your service’ not theirs.

Good outsourcers tend to do this already. The likes of VoxPro in Ireland are very good at adopting a culture that matches their client base. There’s nothing worse than customers being able to tell that an outsource deal has been done due to poor service. If you’re outsourcing your call centre activities make sure they’re trained in your businesses’ voice and tone. Make sure they handle complaints and resolutions as an in-house team would have done. An outsource partner might have multiple clients but they shouldn’t be adopting a ‘one size fits all’ approach to operational delivery.

9. Assess outsource partners regularly

Sign a 3 year deal by all means but don’t review it at 18 months. Make sure you’re regularly reviewing the relationship and performance every month. Stay on top of any issues and be willing to listen to negative feedback coming back your way.

Good luck outsourcers!

To learn more about how we can help with outsourcing visit us at www.strategyactivist.com

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Work in travel tech. A fan of applying disruptive thinking to age old problems. Passions include writing, reading, ski touring and travel. Opinions are mine.