When outsourcing analytics, a seamless working relationship can be built by asking the right questions and comparing your business requirements against each vendors’ pros and cons.
The increasing pervasiveness of digital technologies across the business landscape has created a world where efficiency is highly valued. With the common realisation that this cannot be achieved if all tasks are handled internally, outsourcing certain jobs have become widely prevalent.
However, although outsourcing has emerged as a key element of business today, it does carry a degree of risk since it involves the exchange of data. Moreover, outsourcing the wrong mix of tasks, or even getting into it too early can hurt a business. Albeit these risk factors, it would be myopic of companies to ignore it.
While these mistakes can be corrected with experience, erring when choosing an outsourcing provider can be easily avoided by following due diligence during the selection process.
A seamless working relationship can be built by asking the right questions and comparing your business requirements against each vendors’ pros and cons. This will, in the long-term, optimise your expertise and speed, and augment your company’s operations.
How can you select a robust outsourcing partner that fits your company’s needs? Here are ten main things to consider:-
Assess The Size Of The Vendor
There are many factors involved in outsourcing, and choosing a partner of the ‘right-size’ in congruence with your project is critical to the overall success of the engagement. Simply put, if you are handling a modest project, skip the big firms. Instead, find a provider who will make your deal a priority.
This is because if you hire a large vendor for a small project, you will get mediocre talent from their company and the most talented staff will be assigned to companies that are bigger than yours. Hence, as a rule, ensure that you are a bigger player in this partnership and thus, wield enough influence to command top talent, receive good professional treatment and attention from the executive. This will also ensure that you are not bound by terms and conditions that smaller firms are likely to get from bigger vendors.
However, there is a risk in choosing an outsourcing company that is too small also. They may not have sufficient experience or technical capabilities to meet your business needs. Which takes us to the next point.
Check Technical Expertise
When evaluating vendors’ technical capabilities, compare it against those skill sets that are deficient in your company and those that align with your project needs. If you are looking for a long-term arrangement with multiple projects in mind, then a broader range of skills may fit your business needs better.
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When assessing your client’s technical expertise, it may be prudent to go over the certifications of the staff the vendor is planning to assign to you. While smaller vendors typically provide faster delivery of high-quality services at a modest cost, employees with long tenure can often be complacent.
One way to filter through this is by checking what certifications they hold and how old they are. It may also be useful to know what the company does to keep them current with the latest tools and techniques.
Local Presence with Global Delivery
If your company is based in India, then it is advisable to choose a vendor that is headquartered here. Although technology has enabled seamless digital communication, a local partner that shares your cultural context is better placed to understand your industry better.
In addition to the localisation, a big plus would be if they have a global presence such that they can directly interact with your global sites and be available across time zones. Moreover, vendors that also provide delivery from offshore will save you money.
Communication & Collaboration Capabilities
Location of the IT outsourcing vendor is not as important as thorough and frequent communication. A clear plan should be set in place, and both your company and the vendor must identify primary and secondary points of contact for different areas of the operations for seamless collaboration.
This is crucial since regular meetings with project managers and developers are unreasonable, especially in cases of offshoring where daily iterations are difficult to manage due to time differences. Hence, agile communication and continuous collaboration becomes an essential element in your business relationship and will ensure that your projects remain on track.
Depending on the duration of the project, weekly or daily status updates to demonstrate results and get feedback should be maintained. Additionally, there should be clearly defined escalation processes as well.
This is another reason why companies should prefer onshore outsourcing.
While it is true that outsourcing is often done to maintain high-efficiency levels and to meet the deficiency in technological demands, the majority of outsourcing is done with an eye on profit margins. That is, by offshoring certain tasks, companies eliminate the requirement of hiring in-house experts, freeing up capital, which can be used elsewhere.
When looking to lower expenditure on labour and operational costs, it is important to note that core activities should not be outsourced. Invest in the necessary knowledge levels in-house or upskill available talent instead. This is because by offshoring your core activities, you risk losing your competitive advantage.
Consistency in Quality & Delivery
While costs and contracts may be critical when outsourcing, most vendors compete on their ability to produce results. And the metric used to measure this is two-pronged timely delivery as well as high-quality services.
While conducting due diligence on a vendor, always be sure to evaluate their past work and pursue references to understand how well they had delivered on their promises. The best way to validate the vendors’ timelines and their ability to deliver consistently is by giving them one or more smaller projects and seeing how they handle those.
Business Reputation & Continuity Of Vendor
When evaluating their past work in the above step, you will get a good impression of whether or not their products or services are meeting required standards, and that it is maintained continuously.
Taking into account the reputation of a vendor will tell you a lot about how easy or difficult working with them could be. Offshoring may save you capital, but if service levels drop, the cost of rebuilding your business reputation will be much higher. To get around this, always be sure to select a vendor that has been doing offshore business for a long period of time.
Although outsourcing can be greatly beneficial to companies, they need to be wary about picking the wrong partner — one that does not align with their culture. While working closely with the company, they should operate like an established business, but work like a startup. That is, they must be agile and able to rapidly adapt to ever-changing business needs.
The company culture matters because it affects the quality of the service they provide. Is customer service engrained across the fabric of the organisation? Is it consistent? Although it is harder to evaluate a vendor’s culture, it will be worth your time.
This may have little to do with the task outsourced but will give you a great deal of information on the vendor’s delivery processes. If the sales executive asks tough questions, it is safe to assume that the company has mature processes in place. And this indicates that they can manage details of delivery as well.
On the other hand, if the sales process is not well-organised, you should assume that the delivery process in all likelihood will be handled in the same way.
Although there is some risk involved in outsourcing, the level of risk involved depends on the type of processes that you choose to outsource. Without outsourcing core business practices as mentioned above, outsource development projects instead.
This can be a well-calculated risk that can give your business an opportunity to innovate and grow.
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Anu is a writer who stews in existential angst and actively seeks what’s broken. Lover of avant-garde films and BoJack Horseman fan theories, she has previously worked for Economic Times. Contact: email@example.com