Picking the perfect Outsourcing partner
Here’s what you should know before outsourcing your projects
Although Outsourcing has become quite the trend and cost-effective way of delegating work, choosing the right outsourcing partner is a hard row to hoe. Outsourcing is a way of distributing work to someone who is not a part of the company. Hence the company does not have enough moderating power over this third party. One of the root causes for the failure of Outsourcing is not choosing the proper Outsourcing company. Here are some incidents.
The £1.89 million mistake!
Raphaels Bank, a credit card service company in London, United Kingdom, was fined £1.89 million for outsourcing failures. It has been scribed that Raphaels had inadequate processes and disaster recovery arrangements for its outsourced service providers. Raphaels indeed encountered a £1.3 million loss for not adequately managing the outsourcing deal for its cash machines. It ended up causing huge losses as thousands of customers were unable to use their service cards on Christmas Eve. This is marked as a terrific failure of outsourcing. The failure outlines the following
· Poor project and contract management
· Inadequate management review
· Failing to use a statement of work
The snowballed budget of IBM
In 2007, the Queensland health department in Australia outsourced the development of an administrator payroll application to IBM for a winning bid of $6million. But the project chugged along for several years and snowballed to $1.2 billion and never worked as per the demands. It led to the resignation of the Minister of Health and several staff members. Unplanned and unintimated bills caused massive problems for IBM as well as the health department. The factors that responsible for the failures are
· Failure in understanding the scope of work before bidding a contract
· Setting unrealistic goals
· Failed to adapt to a method for price adjustments
Outsourcing failures need not always be a complete disaster. It is necessary to perform a necropsy of the failed outsourcing contract and spot the key points of failure for better and safer future contacts.
Let me sketch out a few ideas that one must keep in mind while choosing an outsourcing partner.
Decide
Before searching for outsourcing companies make sure what kind of service you need to outsource. Outsourcing should not always be the moto. Understand the steps to be taken along the path that you are traveling through and then choose the right partner. There can be occasions when you alone can make the journey. Choose companies that make it easy to monitor and follow along on the progress. Also, pick a company that shares your mindset and vision for the end product.
Research
After deciding the kind of service you need, do some homework and analyze the outsourcing companies available in the market today. It is always better to hear suggestions from your colleagues, friends, or experts online through reliable websites such as LinkedIn. Checking the history and experience of an outsourcing company is the essence of this process. Pin down the companies that have good testimonials, infrastructure, and offers services that match with your expectations. Ensure quality of client services. Finger passing over their clients’ list is a must. Check the technical tools and methods that they claim to be experts on. Double-check your necessities and their technical skills. Look for its contract details and price package. Don’t be fooled by down to earth costs. Signing to low price and spending double the cost on failures is like rowing a boat with plugged holes, failure becomes an obvious eventuality.
Making contracts
Your aim and purpose must be acknowledged. Assure that the outsourcing company that accepts your contract clearly understands your tokens. Discuss your access to their tools and methodology. Fix the budget and make sure that it includes all research, development, prototype, tools, implementation, infrastructure, and management expenditures. Negotiate to cover the potential inaccuracies that may occur. Sketch out the timeline of the project and ensure that the company is capable of fulfilling your needs within the deadline. Communication is the kernel during this time. Confirm that there are no hidden clauses or overlooked terms in the contract that may lead to fallacy. Active listeners coming up with solutions that greatly minimize your budget and ease the development are to be readily welcomed.
Communication
As Les Brown once said, ‘Your ability to communicate is an important tool in the pursuit of your goals’. It holds to the end of the earth. Efficient communication is the backbone of outsourcing. Look for companies that ensure reliable two-way communication. Stick to sources that are active listeners because demands are met better with when your requirements are well understood. Cross-check the testimonial details while communicating and notice whether they are principled. Ensure a good understanding is built between you and the outsourcing company. A good outsourcing company must care about the development of your organization.
Data Security
It is important to prevent breaches that can hurt the business. If you are handling vast amounts of data, ensure that the outsourcing company has a well-designed security infrastructure. Breaches can end up pushing you into a river of fines, penalties, loss of customers, and even civil suits. Explain to them your work ethics and verify whether it matches with their ethics as well. Look at their privacy policies and double-check if it is within the bounds of legality according to your local laws.
Before ending it, I would like to add that all greener sides are not always green. Make your demands clear, convenient, and acceptable. It is better to deal with taut rope companies that meet your requirements than the companies that give you fancy, delusive ideas. Believe in your guts. Find a friend more than just a business partner. I hope by now you have a clear idea about outsourcing and the factors to consider before picking the right one.
SHRUTHE
