Before your IT project begins, there are many issues and plans that must be considered before you even choose the firm you will be working with. Many of these processes should be in place before the project starts and refined as the project progresses. Below are tips for small-to-medium sized businesses to achieve more positive results in their outsourcing contracts.
1. Don’t Overdo Your Service Level Agreements or SLAs
First of all, time must be given in drafting Service Level Agreements because they help clarify objectives and responsibilities, (especially during problem handling and escalation) which helps direct everyone’s expectations and actions in-sync.
But don’t overdo SLAs by putting provisions that are way beyond your business requirements (and that of your customer) and just increase your expense. And do not put SLAs which you will not have the time nor the motivation to monitor. Always be realistic with your expectations.
2. Provide the Necessary Training to Your Outsourcing Provider
Make the relationship run smoothly by providing the training necessary for your outsourcing partner to do their job right from the start: whether it’s about your company’s business goals, service policies, products, technology, or etc. This may involve a simple exchange of training materials in PDF format, video, and clarifying some issues through e-mail, Skype, and other collaboration tools.
3. Have Regular Performance Assessment Meetings
You cannot simply hire an outsourcing provider and forget about them until product delivery or the deadline. Appropriate performance review meetings should be scheduled regularly to spot problems early on, align work processes according to changes in the business environment, and discover strategic improvements.
More importantly, use these meetings as opportunities to strengthen the relationship with your outsourcing provider and improve mutual understanding. Make the effort to build rapport during these meetings and look into measures to improve the quality of reporting and other communications.
4. Benchmark Periodically to Review Business Value of the Outsourcing Contract
Is it still more advantageous to outsource the project to your provider? Periodically obtain benchmarks using internal resources (how much it would cost to have it done in-house) and external resources (market rate of other equally qualified providers). It is also essential to perform billing audits periodically.
These will ensure that you are continuing to make the right decision for your business and your outsourcing partner is behaving ethically and continuing to provide competitive value for your company.
5. Don’t Micro-manage Your Outsourcing Provider
Check to ensure that your outsourcing partner does not stray from the objectives of the project, but like with your internal employees, do not go overboard with micro-managing your outsourcing partner’s every activity/hour and paralyzing their efficiency.
6. Choose the Right Outsourcing Manager
It is important that the person assigned to handling the outsourcing project has the management and soft skills (professionalism, adaptability and cultural understanding, ability to drive targets, openness to dialogue and other people’s ideas) to make the outsourcing project successful.
The outsourcing contract by itself cannot produce successful results without the right attitude from management and the most common mistake of SMEs is to assign the leadership task to a person based on years of service, despite lack of commitment to the outsourcing project and lack of skills to manage cross-cultural teams.
So when interviewing the potential outsourcing firm, make sure you ask to speak directly to the person that will be managing your outsourced teams.
7. Include Provisions for ‘Changes’ and ‘Required Problem Notifications’
The global business environment is increasingly becoming more unpredictable and competitive. Make changes less disruptive by including explicit provisions for dealing with changes automatically, such as key employee turnover due to piracy, attrition, and etc. Moreover, include a provision that compels the outsourcing provider to notify you within a certain time frame for problems that you consider critical.
Managing your outsourcing projects successfully means keeping it simple for both you and your outsourcing partner to deliver the desired outcomes.
Category: Globalization, Outsourcing Tips