Outsourcing is when businesses delegate specific projects or tasks to an external specialist or a vendor. Many companies are moving towards outsourcing to gain a competitive edge. Statista states IT outsourcing is expected to grow to $777 billion by 2028 versus the current $512 billion.
But why is there a surge?
Outsourcing helps companies boost innovation and access global talent while being cost-effective. Let’s understand how a business can make the most of outsourcing through simple tips and strategies.
Tips and Strategies to Get the Maximum from Outsourcing
Outsourcing may seem like a straightforward task; however, there are a lot of considerations to make it a successful process. Here are some tips that can help you get the maximum from an outsourcing partner:
#1. Defining Goals and Needs
Before you plan to outsource, get your business needs and goals in place. It is an essential first step to get your outsourcing done right. A few things that you must consider in these steps are:
- Assessing Limitations and Capabilities
Always check your internal capabilities carefully, such as what areas you excel in. What needs a little boost? For example, you may have a good marketing team, but the customer service team may need to improve.
- Assessing Current Business Challenges and Operations
Next, it is time to check your business’s pain points. For example, is there any particular process that needs extra attention? Deciding on the outsourcing needs will be easier once you have figured out the main challenges.
- Setting Clear Goals and Expectations
Don’t go for outsourcing because everyone is doing it. Instead, only go when there is a genuine need, as it may be an additional overhead cost. Therefore, you must have clear and measurable goals you want to achieve from outsourcing. For example, if you want to reduce customer support response time by x number or reduce software development cost by x percentage. It will give outsourcing meaning and direction.
- Budget
Outsourcing may be cost-effective, but it still needs investment. Always consider the amount you are willing to spend. This should also mean an amount you can make from the outsourcing processes.
#2. Choose the Right Outsourcing Model
There are two main outsourcing models – relationship-based and location-based. Let’s understand them.
In location-based outsourcing, a team is selected according to the members’ workplace. The three options are:
- Offshore outsourcing – hiring a team from a faraway region
- Nearshore outsourcing – hiring a team from a neighboring nation
- Onshore outsourcing – hiring a team situated in the same country as your firm
On the other hand, relationship-based outsourcing focuses on the working relationship between you and the outsourcing provider. There are three models in this category as well:
- Staff augmentation – it involves expanding the onshore team by hiring offshore specialists.
- Project-based model – delegating tasks to an outsourcing provider from start to end.
- Dedicated or managed team – hiring an offshore team for specific functions and working with onshore teams directly to meet the goals.
Every model has pros and cons, and which is best for your business depends on the requirements and needs.
#3. Understand and Mitigate Outsourcing Risks
Although outsourcing has many benefits, one must also know the risks. This helps in reducing financial exposure and increasing outsourcing efficiency. Listed below are some risks that you must pay particular focus on:
- Control and Trust
Your managerial control will be less when you outsource your work. One way to mitigate this is by understanding the outsourcing vendor, checking their previous reviews, talking to old clients, and being aware of their working methodology.
- Hidden Costs
Hidden costs are the primary reason for client dissatisfaction. As a best practice, always outline the terms and conditions carefully in the contract. This includes payment terms, additional charges, etc.
- Quality Concerns
Quality is another concern that companies worry about while outsourcing. You can lower these risks by collaborating with reputable and trustworthy outsourcing companies dealing with various clients. In addition, also look for a partner that guarantees a quick resolution for any concern.
- Confidentiality
Confidentiality is a top priority. Look for vendors that protect against any ambiguity regarding intellectual property (copyrights, patents, or trade secrets) that you may have about additional staff by asking them to sign non-disclosure agreements. These contracts safeguard the client’s intellectual property rights and address confidentiality concerns.
#4. Speak with Your Internal Teams
When you decide to outsource, it impacts the entire organization. So, properly communicating your plans and strategies with your teams is necessary. Inform them of the need for outsourcing and the benefits to the business. You should especially do it for the people affected by this decision.
#5. Effective Communication Channels
For your outsourcing to be successful, you must have a clear communication channel with your vendor. This will help create a compelling and smooth collaboration between you and the vendor. You can define communication protocols, such as the frequency of communication (daily, weekly, monthly), mode (phone, email, video conference), and the authorized point of contact. Communication will help in regularly analyzing the progress and identifying any potential setbacks at an early stage.
#6. Start Small
If this is your first time going with outsourcing, the best approach will be to start small. Delegating simpler and manageable tasks will help you test the outsourcing vendor and understand their working style. Once satisfied, you can include more processes and build a robust foundation.
#7. Consider Scalability
Businesses outsource their processes with the hope of expansion. Therefore, when creating your outsourcing strategies, always keep scalability in mind. Always go with the vendor with the scope and resources to accommodate your needs, even at the last minute. It will help you expand your business without worrying about hiring or training people.
Final Thoughts
A deliberate strategy with clear communication, well-defined goals, and an emphasis on forming solid partnerships is necessary to maximize the value of outsourcing. You can optimize productivity and realize substantial cost savings through meticulous partner selection, process streamlining via technology, and ongoing performance monitoring. If you have outsourcing needs and want a reliable partner, Tyleia is your go-to option. They are experts and provide all outsourcing services personalized as per your needs.
As the editor of the blog, She curate insightful content that sparks curiosity and fosters learning. With a passion for storytelling and a keen eye for detail, she strive to bring diverse perspectives and engaging narratives to readers, ensuring every piece informs, inspires, and enriches.
