Do companies know what to look for in an outsource partner? It's a valid question, as there are many sorry tales of outsourcing encounters out in the market, so it is worthwhile re-examining the bases and assumptions for entering into an outsource contract.
This assumes the company has made the right set of decisions regarding its business: that it is better for the company to outsource a function than retain it in-house. There is a raft of questions to be asked before arriving at this point, and they are well documented in prior Industry Insights in this series.
Given that a company has discharged the process and internal governance responsibilities, it is now time to look beyond the basics and examine if the outsource party the business is going to partner with is appropriate for it.
Betrothal
In saying this, companies need to consider that an outsource agreement is something akin to a marriage: the parties are going to be together for a long, long time, with mutually vested interests in the success of the relationship. The traditional rules of any relationship apply from now. While one party may contribute financially to the relationship, its success is in both parties' interest, and in reality it cannot be allowed to fail.
So the first lesson is: do your homework and do not be swayed by cosmetic considerations. Just as a potential groom should be swayed less by the mere looks of his bride-to-be, so a company should dig beneath the surface to look for the real attributes of an outsourcer.
Realistically speaking, here is what a company should be looking for in an outsource relationship:
1. Is the future partner financially sustainable?
It might look like it today, but this might change in a year or two. The last thing a company wants is to have a major stake in a service provider which may or may not survive, but which has a more than vested interest in the business operations. Corporate and IT governance demand at the very least that the company has discharged its obligations in assessing the risk and sustainability of the outsourcer. The consequences can be dire if the company has not discharged this basic obligation.
An outsource agreement is something akin to a marriage.
Andrew Holden is MD of Bytes Outsource Services.
2. Can the potential outsource partner meet the company's needs and objectives?
Imagine the company awards a contract to a business that lacks the in-depth pedigree to deliver on a specialised contract.
3. What referenceable base does the company's potential outsource partner have?
This relates to the second point. Outsourcing is so specialised, the company needs to be absolutely sure its potential partner has been around the block a few times, and has happy customers to underscore the point.
4. Can the company cope with the size of the outsourced team?
As an example, an outsourcer might be easily able to accommodate an outsourced contact centre operation of 50 people, but struggle operationally to absorb one of 300. In over-reaching itself, an outsource partner will try very hard and manfully to do what is right, but be overwhelmed; and the company could find itself hamstrung by the operational requirements of managing the relationship. Scale correctly, and the business can avoid this issue.
5. What is the image and educational level of the outsource partner?
We have all experienced the frustration of dealing with poorly educated, inadequately trained contact centre agents representing sophisticated companies. Their accents, skills levels and general deportment let the customer down. Think carefully about the image the company wants to project before entering into a contract with a third-party service provider, especially one that is going to provide complex services to offshore customers.
Outsourcing is not and never has been rocket science. It's much like entering into a marriage, and no potential husband or wife will enter into this commitment lightly. Just so, a potential outsource customer needs to examine the tenets of the future relationship with extreme care and precision.
Otherwise, it could end up in the divorce courts, and that's a costly and ugly route to go!
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