Getting the Best Out of Your Outsourcing Agency
With
increasing standardization of procedures and operations, outsourcing of routine
functions has become a viable and an affordable option. More and more companies
prefer to outsource their backend operations, communications, data processing
and other employee-intensive activities. Hence, the selection of the outsourcing
agency has become a crucial function. It is not easy for companies to find the
right outsourcing agency. Also, there has to be a synergy of operations between
a company and the outsourcing vendor. Without a synergy, there could be needless
repetition and lack of optimal use of company's resources.
Companies that opt for outsourcing their operations must weigh their options
heavily. While there is an advantage of maintaining in-house operations, there
are other distinct advantages of outsourcing these functions. However, an
organization cannot use the same parameters to evaluate in-house operations
vis-à-vis outsourcing. Obviously, the situation warrants different parameters
for evaluation. However, the clinching factor would be the impact of this
decision to the company's bottom line. If it is a viable option, outsourcing
must certainly be considered. If outsourcing is indeed the selected option, then
here is a checklist to get the maximum output from your outsourcing agency.
Managers need to make sure that their outsourcing agency has all the credentials
and the resources available to ensure speedy and efficient delivery of services.
Very often, outsourcing agencies stretch out to grab the deal without having the
necessary resources. It is best to clarify each other's position at the onset of
the vendor-client relationship. Technical snags and the necessary backup plans
need to be devised before operations are handed over.
Ensure that you are getting your money's worth. Get all the numerical data and
work out the cost-benefit ratio before you proceed. It is very important that
all comparisons are drawn in ratios so that you get a fair picture of the
financial angle of the deal. It is also necessary to take into account notional
values such as opportunity cost, efficiency values, etc.
Outsourcing is a competitive business. Evidently the outsourcing agency would
also have top notch recommendations coming from big business houses or reputed
consultants or analysts. Very often there is more than what meets the eye.
Before you sign in the outsourcing agency, make sure that you are not falling
for any gimmickry.
Invite proposals from more outsourcing agencies. This way, you get a comparative
picture of what is on the offer. Now, you can draw your own set of parameters on
the basis of which you compare the offers of the various agencies. Don't just go
with 'low costs high output' deals. Sometimes, factors such as resources,
agency's experience in services, market reputation and the profile of the
management can be the deciding factors. Do a thorough research on the profile of
the agency and their market reputation before signing up.
Once you have zeroed in on your final selection, make it known that the
relationship is a two way process. Both have to work in sync in order that the
relationship works. In the initial stages, the outsourcing agency may seek your
intervention. You must extend all assistance to help the outsourcing agency
streamline all the processes. Once the activities take off, do a periodic review
with all the necessary assessment tools to ensure that your company has got a
good outsourcing agency.
In case the services have not lived up to the expectations of the organization,
don’t be in a hurry to terminate the contract. Very often, the problem lies on
both ends. It is very essential that you make sure that nothing on your end
caused the breakdown of the services. Was your assistance timely? Did you do the
necessary routine check to ensure smooth functioning of functions? Was the
breakdown of services a freak case of bad coincidence? If there is scope to
revive the relationship, you must do all that it takes to restructure the
processes. The cost of hiring an outsourcing agency is too prohibitive for a
retrial.
With these recommendations, managers can get better yield from their outsourcing
vendors and maintain a healthier client-vendor relationship.
