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How to choose the right outsourcing partner

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Once you've decided to outsource some of your business activities, the next step is to find the right outsourcing partner. This requires careful consideration, when done right it will bring you savings and give your business a competitive edge over others, however, if your project ends up in the wrong hands your plans for growth could be endangered. To ensure you choose the right outsourcing partner for growth always do the following:

Select defined goals

To clearly brief an external partner on your goals, you'll need to define them internally first.

It's a good idea to gather an internal team from different parts of the company who can help to evaluate vendors. You can involve staff from all affected business areas, like IT, HR, legal, etc. Together you should define the high-level requirements of the outsourcing partner and then break them down into specific goals.

You can't expect outsourced personnel to have the same familiarity with your business as your in-house team. This is why you need to set specific goals, such as 'increase this performance metric to that level', not 'improve our profits' or 'increase our performance'.

Choose an established reliable partner

Find a partner who maintains high quality standards, has worked on similar projects before and has been in business several years - so that chances are they won't go bust within a year.

To select an established partner, ask for relevant case studies and trustworthy client references from your field. Other questions to consider include:

  • How long have they been in business?
  • Are they expanding or shrinking in size?
  • How many employees/offices do they have?
  • What is their experience in your industry?
  • What types of projects have they worked on in the past?
  • When was the last time they had someone working on a project like yours?
  • If quite recent, will the same team be working on your project?

You should also visit the vendor's site to check if infrastructure, the available staff and safeguards, are in place.

Ensure technical competence

Find out if the vendor is has the technical knowledge, appropriate qualifications and experienced staff to efficiently handle your project. Check what processes the company follows and what methodology they use when tracking results and resolving issues.

Pick the right sized team

Unless you are a large company that can get a provider's full attention, don't fall into the trap of picking the biggest provider. Smaller companies are often assigned the 'B-Team' - a team of less experienced professionals or are treated as a less important project.

However, the vendor will be still charging you higher rates based on their reputation. A smaller partner will generally charge less, be more flexible and put in more effort.

This consideration is one of the most overlooked, yet crucial factors when choosing an outsourcing company.

Pay attention to communication

Clear communication between you and your outsourcing partner is paramount.

If possible always meet the outsourcing partner's team lead to ensure that the teams will be able to work well together. This initial contact is a strong predictor of the future relationship and collaboration.

If the outsourced company is based abroad, think about the possible language barrier and time difference implications. Ensure your partner has a good understanding of your working culture, acknowledge any cultural differences and be prepared to manage them sensitively.

Consider a test project

Sometimes outsourcing companies offer to test a project or a trial solution. A test allows you to experience the vendor's project management process before jumping into a long-term relationship.

This is a great way to evaluate the fit between you and the vendor. Use this opportunity to review your potential partner's efficiency and effectiveness, especially whether the execution adhered to high standards and was timely.

It's a clever idea to run 'proof of concept' with a few companies to compare the results, and after evaluation, choose the best fitting one.

Outsourcing is the long-term relationship, so choosing the right partner is crucial to meeting your business, financial and technology objectives. The key advice is to remember to pick an experienced, but not necessarily a large, provider as smaller firms often pay more attention and strive to deliver better service. Consider all factors mentioned above to eliminate the risks of engaging in with a wrongly-selected provider and rip the many benefits of the outsourcing relationship.