10 Practical Tips on How to Outsource Effectively

In this blog, we’ll help you gain more insights on how to outsource effectively. Because even with plenty of successful attempts cited, confusion still abound about perfecting the process of outsourcing.

All along, there’s been an almost endless debates and talks whether or not outsourcing is a boon or a bane.

For the uninitiated, outsourcing is a strategy in business where you get a skilled external consultant to accomplish your work for less money. Here is where you’ll often hear familiar success stories of cost savings and efficiency.

For example, it’s now common to hear stories of outsourcing success gained by small businesses out of their outsourced payroll processing to a Manila-based offshore firm like paying only a fraction of the cost they will be charged by a local talent.

But it’s not all success there is to know about outsourcing. There are also risks attached to it, and a dash of confusion sometimes.

That’s our hint to come up with this blog about smart and practical outsourcing.Our aim is to help business people avoid the hassles and confusion involved when outsourcing for the first time.

By following our tips and learning the ropes on how to outsource effectively, you’re on your own to boost the real value of your small business, to heighten your outsourcing knowledge, and to grow your business more effectively.

Now to our list of tips on how to outsource effectively with a third party service provider:


1. Clarify Your Statement of Purpose.


Clarify GoalsSet your project purpose, specify your needs and estimate a realistic schedule before you talk with any prospective outsourcing partner.

This might come off as an obvious tip, but you’ll definitely find this need imperative during your search for a competent and perfect outsourcing partner.

By giving clear, accurate and complete information about your project requirements, you are helping your service provider come up with a realistic proposals and a fair price quote.

You can also cite your schedule requirements, which can draw huge impact on the cost of your outsourcing contract.


2. Weigh All Sides When Evaluating Your Outsourcing Provider


Evaluate Outsourcing ProviderWhen choosing the right partner to trust your outsourcing works, engage your prospects by asking important questions like you’re hiring a full-time employee.

Experienced companies in outsourcing would tell you that it’s like hiring a full-time employee where you ask the most important questions about their capabilities and qualifications.

Add the process of checking your prospective partner’s references and independently calling former clients for feedback. As much as possible voice your concerns to avoid encountering problems the moment you signed a partnership contract.


3. Test Your Partner With Sample Work


Test Sample WorkMerely hearing your vendor speaks about their capabilities and skills sure aren’t enough to rely on when choosing a partner.

And even after you’ve viewed your provider’s portfolio and reach for references to check competence, you’re often still feeling a bit tense about trusting the work to your outsourcing partner.

One way to test their skills and qualification is by asking your vendors to do a simple mockup design or application.

But you should definitely not do this just to get a finished work for free. Make sure to compensate fairly your prospective vendor.


4. Price Shouldn’t Be Your Determining Factor


Price Not a FactorWe asked some companies about their tips on how to outsource effectively and they have something against making a decision based on price alone. It’s tempting right?

Looking for the highest-priced bidder and simply wait for the best to arrive is wrong. And don’t expect paying for the lowest-priced service will be any better.

Top companies advised to seal a deal with a vendor that can offer balance of good value ad quality service, but never between any of the two extreme price offers from vendors.


5. Experience Matters.


Experience MattersWhen looking to outsource your tasks or project, it’s perfectly normal to expect them to have gained experience relevant to your line of work. For complex projects like mobile software applications, it’s highly critical factor to expect your vendor to be expert in the mobile development field.


6. Start Small.


Start SmallBesides giving out a test project, here is one of the tips most companies experienced in outsourcing give: start with small project with your vendor. This is especially applicable when working with a service provider for the first time.

Once convinced of your outsourcing partner’s capabilities and process, that’s a signal you can start giving more difficult projects.

You can start offloading your company’s more critical projects to your vendor.


7. Negotiate Ownership of Project Up Front.


Negotiate Ownership Up FrontWe’ll never end this collection of advice on how to outsource effectively without touching on the legal side of things. Copyright or ownership of the finished product or service must be spelled out the first moment you meet with a vendor.

Both parties must agree on the terms of use of the deliverables and up to what extent the respective parties are accountable. Often this is more complicated when the project is bound for reselling.


8. Tie Payments to Project Milestones.


Pay By Project MilestoneBesides crafting a well-defined project scope, take note also that you’ll need to draft clearly defined milestones. There’s another purpose for this – having a scheduled milestone – to help you beat deadlines and meet quality assurance standards.

You can then tie to these milestones your payment to your outsourcing company partner. If you have 3 or 4 milestones, you can use these to tie with your payment modes to your partner.


9. Put Everything in Paper.


Put Everything in PaperEvery bit of change or modification must be written or documented to ensure that you and your vendor have a reference point when you need to settle something or recall a decision made.

Getting everything written comes handy everything, including changes requested by your outsourcing partner or whether or not you gave your go-signal for a specific recommendation.

If exchanges were made online, make sure to keep a copy of your email conversations.


10. Ask Your Partner for Support Availability.


Ask for SupportAsk whether your service provider offers continuing technical support after your project has been completed. For your protection, this must be ensured and specified to get the most out of your investment.

Providing technical support can be specified through a warranty or support clause under your agreement with an outsourcing company.

This tip draws from our own collection of advice on how to outsource effectively and definitely deserves to land in our top 10 lists. The time, money and frustrations you save out of a good agreement are actually important.


Final Thoughts


There you have it, folks. Done right, outsourcing is a very effective strategy that small businesses can count on during difficult times.

With more time for you to focus on your core business functions, the higher chances for you to grow your business. And you’re definitely fine if you can get all your goals accomplished for less money.

At Big Outsource, we have the solutions to cater to every possible outsourcing problem that companies encounter. Our range of IT and call center outsourcing can help fill your talent gap and productivity woes at truly affordable rates.

Follow our advice on how to outsource more strategically and the opportunities to seize are endless.