Thursday, November 23, 2006

Top 10 tips on Outsourcing

Do an internal viability investigation

A viability test is important if you are looking to outsource for the first time. Through a thorough analysis a company could identify areas where they are extremely good at and areas that companies need to take expertise support on. Differentiating each department and evaluating strengths and weaknesses of specified departments can be a wise scheme before deciding what department or project is to be outsourced.

Identify your core business

It is important for companies to know what kind of business they are engaged in and then clearly identify the core business area. Companies should definitely allocate more resources for the core business and look for a specialized company to undertake areas which they are not so good at or have better potential in terms of gaining enhanced cost advantage.

Identify a service provider that fits your requirements best

It is of prime importance that the company concentrates on evaluating the best potential service provider for their support services or services they need to cut down costs on. This evaluation process will consume a lot of time and sometimes money too yet it is all worth it. It is extremely important that you choose the best alternative and have few options ready incase the best service provider does not match with your requirements.

Choose a well established service provider

When Outsourcing your support activities to a service provider it is important that you choose a company that is well established in the industry. The company reputation matters to a great extent when the competitiveness increases.

Look for a service provider that best match your culture and company background

Cultural understanding is a key feature that brings out a close relationship with companies. A company with a mixed culture or a culture close to your company background has a great potential to be more flexible in terms of communicating important business matters.

Be ready with a detailed description of the requirements

The service provider should have a clear understanding about your requirements. Communicating the key features to the service provider can be a crucial aspect if you are not prepared with the necessary facts. Have a basic documentation ready to be provided and a strong communication base should be established especially if you are planning to outsource to an offshore service provider.

Be sure Methodology and process is aligned with your company
The methodology and the process used by the service provider should compliance with the company. A key feature for this is to have a good communication network built in order to precisely converse the requirements.

Look in to Resource flexibility

It is of prime importance that the companies choose a service provider that will match their inbuilt requirements. The service provider should be able to allocate or do changes to the resource requirements if the company is not happy with certain resources that is been provided to complete a specific task. The service provider should also be able to outsource resources if the company requires additional skills. Look for a service provider who is flexible so that you could pick the best resources that will fit your stipulations. A service provider who has backup resources will diminish the risk involvement; therefore support services that are of importance should be looked at from a broader perspective.

Evaluate the Cost advantage and quality of work

Cost is another significant factor that a company should broadly focus on when evaluating different service providers. Cost should be in par with the quality aspect and this could be a critical evaluation when obtaining the best service provider. If you are already engaged in the same field and need to outsource certain additional work, cost and quality is a main concern that should be looked in to.

Keep your options open

When Outsourcing start off with a relatively small project and be sure that you keep your options open. It is important how you allocate resources for outsourcing. Having alternatives will definitely reduce the risk involvement. Also make sure you have a backup plan incase things do not work your way and plans need to be changed.

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