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5 Steps Before Outsourcing!

Maneet Puri

May 07, 2009

Outsourcing is serious business. The right approach may gain you several benefits while a slight mistake can take toll on the entire outsourcing project. Therefore, one needs to be extremely careful when it comes to planning for the outsourcing projects. Before the start of the outsourcing project, there are several factors that you need to consider and analyze such as:

Time needed to complete the outsourcing project

Expertise of the available staff

Confidentiality risk at the service provider's end

Market forecasting

These are some of the critical considerations that you need to make before you enter the outsourcing industry and begin your offshoring your business processes. Here are some tips to take efficient business decisions that will make sure your outsourcing project is a success.

Outsourcing vs. Subcontracting

Outsourcing refers to the practice of hiring external service providers to complete particular processes and operations at their locations. On the other hand, subcontracting involves hiring employees on contractual basis to get the work done. Subcontracting enables you to have full control over the proceedings but you need to devote time attend that. However, by outsourcing you can totally make the service provider responsible for the work proceedings and be entitled to quality deliverables.

Considerations before Outsourcing

Importance of the process – Identify if the project is a core process or a non-core peripheral task. While core processes are best kept within the company, peripheral data related tasks can be outsourced very well.

Skills of the Service Provider – Examine if your potential service providers have the requisite skills, expertise and technology to support the outsourced process and diligently perform all the duties.

Time – Determine a fixed time period for the completion of the project in compliance with your service provider. Also, check if the project can be extended after the contractual time.
Confidentiality Issues – Make sure that your service provider follow strict confidentiality measures to secure the information provided to them.

Tips for Outsourcing

Don't outsource the core process of your business. This is because the core processes need your expertise and outsourcing them will lead to loss of control over the business altogether. Not only will the present business scenario become uncertain but also, the qualities may get deteriorated. Ideally, you should outsource parts of your business that needs expertise that you don't have or process that consume too much of your time. Outsourcing such tasks let you concentrate more on the core objectives of your business and you can focus more on revenue generating activities.

Make sure you spend a good amount of time selecting a good service provider. This is very critical for the overall success of your outsourcing project. Check the security measures that they follow in order to make sure that your data is in safe hands. Also, inquire about the expertise and experience of the staff there. The professionals should be able to handle the task well and provide quality results within the specified time.

The last and most important point is to sign a service level agreement. The SLA lists all the terms and conditions of the project so that there are no conflicts or issues whatsoever during or at the end of the project.

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