Outsourcing may be one proven way to reach business success, but the strategy is not without pitfalls. Before you send work to an outside vendor, ask yourself these questions:
How reliable is the vendor?
When you outsource tasks that are essential to your company's operations or processes, you make your business dependent on a third party. Your operations will be affected by the vendor's shortcomings or errors, and a lack of reliability or stability will make it difficult for your regular employees to do their own jobs.
Before outsourcing to a vendor, inspect the equipment and premises he or she will use to meet your service requirements, talk to their references and interview the potential vendor in person so you know what to expect.
How do you plan to measure success?
Business owners outsource to save on costs, boost financial or organizational flexibility, increase the company's ability to grow, focus more on other parts of the business or gain special knowledge that the vendor can offer. Before you hire a vendor, define your goals and create metrics that identify the success factors you expect.
What targets will the vendor need to meet?
Outsourcing is a type of delegation, and your job is to clearly outline exactly what you expect from the vendor. Communicate the standards, time limitations and quality levels that must be met for each and every task they will handle. For instance, if you are outsourcing customer service tasks, you may demand that every email is answered within 24 hours and phone calls are answered before the third ring.
Are my employees on board?
Bringing in an outside vendor to handle important business operations or processes can cause your employees concern, and outsourcing may even inspire resistance. Understandably, your current employees may worry that their jobs will be the next on the chopping block.
Before you outsource, gauge employee support and encourage cooperation by creating a committee of vendor representatives, key employees and an expert who specializes in outsourcing. The committee can be tasked with navigating difficulties, analyzing problem areas and making employees more comfortable with outsourcing.
Will the vendor understand your business?
One of the top reasons to outsource to a third-party vendor is to take advantage of their knowledge and expertise, but your own organization also has valuable knowledge. Your new vendor will need to know this information, like customer preferences, specialized suppliers, trade secrets and other key elements of the way you do business. Before hiring, open the lines of communication and transfer key info through training sessions or briefings in an accurate, timely and detailed manner.