What will your company do when searching for an outsourcing provider? If you’re like many businesses, you might dust off an old Request for Proposal, make a few changes, send an email to your regular list of outsourcing companies and then choose the outsourcing proposal with the lowest cost.
Unfortunately, that approach is likely to be unsuccessful in identifying the best outsourcing candidate for your current needs. While companies frequently outsource to save money, the big picture is more complicated than simply reviewing how to reduce expenses. In this article, Data Centre identifies five outsourcing questions to ask before you make a final decision.
Is Outsourcing Strategically Aligned With Your Business?
It is true that a traditional outsourcing perspective often focused on little more than cutting costs but forward-thinking business managers quickly realized that paying attention to long-term strategic factors is more cost-effective than a unilateral decision based on short-term costs alone. Common strategic considerations for outsourcing in a competitive business environment include enhanced flexibility, growth, adaptability and innovation.
How Much Impact Will Outsourcing Make on Your Processes and Costs?
What are your baseline costs and processes? In reviewing your outsourcing checklist, there are rarely any easy outsourcing questions and answers especially when it comes to reviewing business processes that are under consideration to be outsourced as a way of helping your bottom line.
In particular, a thorough review of current costs and operations will help you in multiple ways that extend beyond any outsourcing decisions. Ideally your process review will entail both a high-level review by top management as well as detailed analysis by managers at all levels. This will undoubtedly lead to other questions, for example, in what areas would outsourcing enable your company to improve quality while also reducing costs and providing faster delivery to your customers?
Is Top Management Supportive of Your Outsourcing Decision?
How does your CEO feel about outsourcing? If the outsourcing review and selection process does not fall within the company’s Top 5 Priorities, you are likely to be fighting an uphill battle in such instances, outsourcing failures are always more likely to occur.
To create the best chance for outsourcing success, starting at the top is a winning outsourcing strategy. This extends to departmental levels as well for example, the Vice President of Human Relations should be fully on-board with outsourcing decisions involving HR tasks.
However, don’t stop with the top levels such as the CEO and VP of HR overcoming objections and winning over lower-level managers is also of critical importance to successful outsourcing decisions.
Are You Outsourcing to Fuel Your Business Passion Further?
It is prudent to keep in mind a working definition of outsourcing contracting outside of the company for necessary and non-core services. Even with this straightforward 10-word definition, the non-core aspect is often overlooked.
You should always remember that a major benefit of outsourcing is that it gives you and your employees more time to focus on core activities focusing on decisions and tasks that involve your business passion. For example, this might involve identifying new areas for business expansion. By including this question in your outsourcing checklist, you are more likely to end up outsourcing for the right reasons.
Do You Have a Process to Monitor Outsourcing Performance?
How will you know if your outsourcing vendor is living up to their promises and your expectations? One prudent strategy is to use a service-level agreement that acts like a scorecard to monitor services with measures such as effectiveness, efficiency, conformity, timeliness, user-friendliness, reliability, capacity, availability, speed and quality.
One More Thing to Remember