Outsourcing Success Tip #1: Outsource for the Right ReasonsTaking a bad business process and outsourcing it only makes the problem worse. Without a doubt, an outsourcing vendor should add value to your business, but should not be relied upon to fix the problems inherent in your business. For example, if your IT department consistently misses deadlines because users keep changing their minds, outsourcing this function will result in higher costs and higher levels of frustration.
Outsourcing Success Tip #2: Thorough Vendor Selection Process
In the Deloitte Consulting - 2008 Outsourcing Report 35% of executives responded that they wished they would have "Spent more time on vendor selection and vendor evaluation" before signing an outsourcing contract. The outsourcing decision can be distorted by emotions and manipulated by company politics. A successful vendor selection process will remove the emotions and control the company politics.
Outsourcing Success Tip #3: Make It MeasurableAlso, in the Deloitte Consulting - 2008 Outsourcing Report 49% of executives responded that they should have "Defined realistic service levels that align with business goals". If you don't analyze and define quality measurements and/or service levels, how will you know if your outsourcing vendor is performing to your standards?
Outsourcing Success Tip #4: Follow UpAfter the newness of the outsourcing relationship wears off, it is human nature to sit back and enjoy the ride for awhile. Unfortunately, this leads to complacency and attention to performance can be forgotten. In order to avoid these symptoms, set a timetable to review your outsourcing vendor's performance. Also, appoint a manager or executive that will be held responsible for the follow up. If needed, send your staff to be trained in vendor management skills and techniques (check with local colleges or universities). This strategy will also yield the ability to deal with unforeseen circumstances on a timelier basis and mitigate the risk associated with outsourcing.
Outsourcing Success Tip #5: Know When Your Going Over Your HeadSeek an experienced advisor or consultant if your outsourcing project involves any of the following circumstances:
- The project is big enough that it will expose the company to significant risks
- Company politics are jeopardizing the success of the project
- Management does not have the experience in vendor evaluation and vendor selection