When to Outsource
When should you outsource?
- When you want to free up your time to focus on your core competency and grow the business.
- When you do not have or cannot afford to get to hire permanently for the professional skills and knowledge.
- When you want to stay current on laws and taxes.
- When you want to outsource a percentage of a certain function as a backup system.
- When you want a backup system to be provided by an outsourced staff
Steps How to Outsource
Once you have recognized the benefits of outsourcing and have decided to seek the services of an outsourcing company, there are some procedures that will help you find which will best meet your requirements.
• Study your company’s internal process. A team from your IT, finance, and HR departments can help you in this process.
• Identify the core and non-core activities of your company.
• Study which of the functions in your company that will benefit from outsourcing. Identify the high-cost from low-cost functions as well as the high-productivity from low-productivity functions.
• Then, tailor your business process (BPO) based on the cost and risks.
• Based on the plan you develop from your study, present it to the outsourcing company for their evaluation as to the workability of your BPO. Coming up with the right BPO partner is vital in getting the most benefit from the success of your BPO. The relations between your company and your outsourcing provider must be closer than that of a buyer and the supplier.
How to Find the Right Outsourcing Company
• Appoint a group to take care of selection of potential companies to outsource.
• Draw up a list of the minimal qualifications or criteria that a service provider should possess.
• Send a Request for Information to prospective outsourcing companies.
• Evaluate each of their proposals. Watch out for fine prints in their offers. Make use that every points and issues are clearly stipulated and put on writing to prevent any misunderstanding later.
In your evaluation, you may consider the following issues:
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See if they can come up with a customized BPO for your unique requirements.
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Ask for case studies
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Provide you with resumes of personnel they will provide you.
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Copies of industry certifications.
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References from present and previous clients
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Proof of financial stability
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Number of present employees
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What are their facilities
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Years of experience in the outsourcing business
• Meet with the candidates face-to-face for final evaluation
• Select the best one you see fit to meet all your requirements based on your BPO.
All in all, allow a maximum time of 6 months to do the proper selection of an outsourcing provider allowing the following tentative time for each process:
30 days to compile a list of potential companies
60 days to receive and carefully evaluate each proposal submitted
30 days to finalize selection and signing of contract.
Cost Concerns
Be clear on the following issues:
Do they have hidden fees or insurance fees? Study the fine prints in their offer.
Inquire whether if the outsourcer is paid on a monthly basis. Ask if you may be charged above or beyond that.
Do they have insurance for errors and omissions committed by their personnel on the course of their work? Be sure that HR services have errors and omissions insurance.
Managing an Outsourcer
The following are essential to a successful relationship with your outsourcer:
Having an outsource company is not a total hands-off arrangement. You must have continuous management over them such as:
• Maintaining a regular communication with them. This important
• Defining clear expectations. Best to this in writing.
• Assigning the management responsibility clearly within your company
• Maintaining service level agreements.
Initially, outsourcing may cost the benefits to your business in the long run may make up for the difference a hundred times – not to mention the benefits to your own peace of mind.