There is nothing wrong with outsourcing some of the company processes to save money. Most companies do that at some point of time or another. But before outsourcing any process, you need to know whether the service provider (or vendor) can satisfy your requirements properly. There are lots of providers out there who will take the order for the job and the payment made in advance. However, when there are tight deadlines to be met, you get little more than some ingeniously crafted excuses from them. It’s surprising how good the excuses can be at times, ranging from network problems on a global scale, to a sudden employee turnover rate in the provider’s organization.
I have a friend who’s a manager in an MNC. His department takes care of software development, where around 40% of the work is done in-house and the rest is outsourced. The first vendor, whom they had hired to get the job done, missed three deadlines in a row for a project that was basically the bread earner for the entire company. When confronted over the phone, the person representing the provider mumbled something about employee unrest in the company. My friend, who was already under considerable pressure from the upper level management, just snapped. He threatened to sue the provider, got most of the advance payment back, and hired a smaller, but more efficient provider to take care of the job. His company got saved from almost certain demise, and he got the credit for that. But the moral of the story goes, “if you want something to be done right, get the right person to do it for you.”
All the hassles that my friend went through could have been avoided, if the top level management was a little more careful while choosing the service provider. A lot of companies outsource tasks to inefficient service providers who end up botching the job at the worst moment. However, these problems can be avoided by being a little careful. If you are trying to find an outsourcing service provider, there are some points that you have to consider first. These include:
Treat all providers with equal suspicion at first – Just because a provider sends over a charming sales team does not mean that their teams would be just an efficient. Grade your providers only after a thorough scrutiny.
Choose the right-sized, proper vendor – Make sure that your vendor has sufficient manpower to get your job done. Many a times, providers can provide an inflated estimate of their workforce statistics. Say that you will make a visit to their office, and make good of that promise. While you are there, check the number of employees and compare it with the figures they provided beforehand. Notice whether the employees look happy. Do they look enthusiastic about working? The morale of a workforce says a lot about its efficiency.
Run pilot projects before the actual ones – This might stretch your budget a little bit, but do it anyway. A pilot project will help you evaluate the actual efficiency of the workforce at the provider’s office.
Lastly, when in doubt, don’t hesitate to seek help of professional organizations that help in screening service providers. Have the background of the provider checked thoroughly. It might cost you some portion of your budget, but this can surely save you from hours of headache later on.
