How to Outsource

[typography font=”Myriad Pro” size=”24″ size_format=”px” color=”#2727b8″]How, What, and Where to Outsource[/typography]

Now that you understand the basics of outsourcing – and hopefully have begun to consider how you can implement this strategy in your business, you need to examine how feasible it is for you.

Outsourcing is a way to transform and grow your business through intelligent delegation.  There are many things to consider as there would be with any other major change.  The important thing is to look at the potential benefits and drawbacks from every angle before you commit to a decision.

You should explore both the financial implications and the overall effectiveness for your business. It can be very advantageous, but only if you do it right.  If not, you may end up shifting work around and spending money without improving your situation.

Approaching the idea of outsourcing as simply a means to push work off on someone else is not a good way to do it. It has to be part of your long-term strategic plan – an entirely new way of running your business, which must be approached with care. You must learn how to outsource correctly so that there is a significant return on your investment.

EVALUATE YOUR NEEDS

The first step is a thorough evaluation of your business.

  1. What are your specific needs?
  2. Identify all of the daily tasks that are critical to the business.
  3. What are all the routine tasks that take a great deal of your time and could be done by someone else?
  4. What are the tasks and projects that occur less frequently, but could be done by someone else?
  5. Which of the tasks must be kept in-house?
  6. How much can you realistically budget for outsourcing?
  7. How would outsourcing fit into your business structure?
  8. What are the clear benefits (pros) of outsourcing to your business?
  9. What are the cons?

DEVELOP A PLAN

Outsourcing Decision
Image by Jakub Jirsak

If the results from your evaluation indicate that moving forward is a good idea, the next step is to develop a plan.

  1. Make a list of the tasks you would be most effective and financially sound for you to outsource. List them in the order of priority. Remember – you can start off slowly. You may want to outsource a single task at first. This will help you develop a process that you can apply for all future outsourcing efforts.
  2. Research – educate yourself on the companies, types of services offered, and costs. (Do they fit your needs?)
  3. Develop a budget – be realistic. (You need to hit a balance between what you can afford and what you must pay for quality work.)
  4. Develop an outline of the training you will provide for the task.
  5. Select a reputable outsourcing service that provides the work you need at a reasonable cost.
  6. Sign an agreement and begin the process of training.
  7. Don’t forget to have a plan for monitoring results and quality so adjustments can be made if necessary.

SELECT A SERVICE

All outsourcing companies are not the same so it is crucial to take time to do the research and ask the right questions. Prices will vary depending on the size of the company, the amount of Western staff, whether or not the service has an office in North America, and the type of work being outsourced.

Do not overpay. That will defeat the purpose of outsourcing. . . BUT – do not select a service based on price alone. If a service is unable to perform services adequately, they are not a bargain at any price. Inadequate or poor quality services can quickly damage relationships with clients.  It can also create problems with meeting deadlines and completing work to your specifications.

You get what you pay for. Lower fees can mean the staff is not well trained, they may have a higher turnover rate, or the company may not be able to stay in business for the long term. If this happens, you will have to start all over with a new service, which costs you time and money.

It is important to note that the transition to outsourcing is not instantaneous. It is not possible to hire a service one day and have them into full production the next day.  Their employees must be trained in proper protocol per your specifications.  They must be able to answer the questions that your customers will ask and perform any tasks that will be required.  This training takes time, which means that the length of time between hiring an outsourcing service and shifting the workload entirely to that service may be longer than you think it will be.

In addition to the training period, there will be an adjustment period. Mistakes will be made in the beginning, so be prepared to manage and correct them.  Managing them, correcting them, and minimizing them can be done through clarity of instruction and clear feedback. You do not want to sabotage the relationship that you have with your new service because of some initial problems.  There is not way to avoid the early mistakes – it takes a little time for the kinks to be worked out; so, be patient and keep the communication lines open.

MONITOR QUALITY

Get to know the person in charge of quality assurance for the services that the group is providing. Work with that individual to implement quality assurance procedures for your business. You will be able to provide useful feedback and suggestions to increase effectiveness. Be sure that their quality standards match your own and that they are being monitored and maintained.  When you understand how your account is being handled, you will be able determine whether or not every one involved understands and agrees with your definition of excellence.

One option for checking quality is to monitor calls from your home office. Stay involved in the process and let the service know that you will be checking in to make sure that calls are being handled properly at all times.

Some customer service issues cannot be resolved offsite and it will be necessary to have a procedure for those calls to be redirected back to your office. This will help ensure that all calls are handled to your satisfaction.  Obviously, you want the service to handle as much of the work as possible – that is why you contracted with them; but, having the option of transferring complicated calls back to the main office will ensure higher customer satisfaction.

KEEP COMMUNICATION LINES OPEN

Regular communication between your company and the outsourcing service is an imperative.  Requiring detailed daily reports and periodic checking will ensure that you are aware of how the process is working and any problems that must be addressed.  For example, you will want to know the volume of calls and emails and how they are being handled.

Ask for the service company’s procedure for handling problems. Have them explain it to you in detail and be sure you understand it.  Verify that the staff is well trained on the procedure and have the ability to carry it out if necessary. An improperly handled problem can hurt you and your company’s reputation very quickly.

Another factor that should be considered is the service company’s ability to change with the changing needs of your company. The business world is ever-changing and so are your needs. Evaluate their ability to adapt to change. There are growth factors that will impact their workload, necessary changes in format and content, and overall changes in demands of your particular field (or type of business).

Also discuss how they will communicate to you in a timely manner any changes that could impact the services you receive.  For example, if they will be handling a high volume of calls and emails and for any reason they are suddenly unable to handle all the calls/messages, you must be informed immediately so you can do whatever is necessary to ensure that business will continue with an little interruption as possible.

UNDERSTAND FEES AND PAYMENT SCHEDULE

Have a clear agreement on fees and payment.  Methods of payment will vary depending on the situation. Do your homework on this point and be sure that you have all the facts.

Most services work on advance payments, which require you to pay anywhere from fifteen to thirty days in advance for their services. Advance payment is something you should keep in mind as you develop your budget for outsourcing. The reality is that you may have to pay a rather large sum up front.

To prevent misunderstandings – be sure you understand their payment schedule, invoicing process, late penalties, etc. and include the payments in your monthly budget so you do not fall behind.

Remember – this is a great idea that will serve you well, if it is done correctly. Don’t take shortcuts.


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