How to Qualify your Outsourcing Partner
Yes you read it right.
An arrangement between your company and an outsourcing services provider should be considered a partnership.
While both parties to the agreement are bound by a contract punctuated by mutually agreed-upon provisions, at the heart of it all is a relationship. As with all relationships, the foundation must be built on trust, transparency, respect and commitment. A partnership connotes shared interests and a willingness to contribute resources for the success of the relationship.
If the parties to the outsourcing services arrangement merely view the process as compensable trade, then returns on investment will not be maximized. Outsourcing should benefit the stakeholders not just the stockholders. This is one of the biggest oversights that lead to a failed outsourcing engagement.
Companies that choose to remain distant and simply maintain a “Client” to “Service Provider” arrangement will only protect its own interest and be unmindful of the other party. Both parties will only perform according to what is required without any initiative to surpass expectations.
A partnership moves to protect the interests of both parties and encourages everyone on board to perform to their best. In view of this, how should a company qualify its prospective outsourcing partner?
1. Build a shortlist of prospective outsourcing partners.
There are a number of ways to build a shortlist:
- Referrals – Go over your contacts list and find out who among your associates and connections have had the experience of outsourcing services. Invite them to a scheduled meeting and extract as much information and feedback as possible.
- Network – Join focus groups online and engage members in sharing their experiences. Some may recommend outsourcing companies but be mindful that there are the risks of dealing with scammers and those with vested interests.
- Post an ad through social media – In addition to the job/contractor search networking sites, you can post an advertisement through your company’s website and social media sites.
- Request assistance from the embassy – More often than not, the embassy will help businesses connect with the local economy as a gesture of goodwill. The embassy may connect you with reputable local outsourced groups or business organizations that can provide these services.
Search the Internet – A search query such as “Outsourcing Services to the Philippines” will yield several websites of companies that may potentially provide you the specific services you need.
2. Filter the candidates.
Filtering can be done through the following means:
- Request for company materials such as proof of SEC certification and the list of officers.
- Request for recommendations from previous clients then conduct reference checks.
- Request for contact information then verify the authenticity of the numbers and addresses.
- Request for a copy of the IT schematic diagram and technology profile.
- Instruct all the candidates to submit all of the requirements within 24 hours. Eliminate those who do not comply on time.
3. Conduct due diligence work.
With all of these documents available, you can do background checks via the internet or personal reference checks.
- It is imperative that a prospective service provider has a fully functioning and updated website. The type of website is less important than its content. One of the more important sub-pages of a website is the “About Us” page. It presents the values, purpose and vision which guide the company.
- Check the social media accounts of the company. The social media accounts will give you an idea of the personality of the company. A significant red flag is if the company does not have images of the officers in its website and any of the social media accounts.
Conduct a search query on the company. Sometimes a simple search query is all you need to find out if the prospective service provider is trustworthy. From personal experience, one such query yielded a result that the candidate was involved in several online scams.
4. Invite the remaining candidates to a scheduled online call or meeting.
The meeting can be conducted on a virtual meeting room but always make sure it is in audio-video format and covered by call recording. The preliminary meeting is generally introductory. It is an opportunity to learn more about the company and verify results of the due diligence work.
5. Ask more details from the remaining candidates
These are some things you can ask:
- Draft of preliminary Business Plan
- Timetable of activities covered by a Gannt chart
- Copy of Service Level Agreement
Each candidate will be asked to present the Business Plan and negotiate on the Service Level Agreement or SLA.
In the final analysis, the decision on which service provider to award the contract to should go beyond pricing points. With respect to the qualifying benchmarks, the contract should be awarded to the service provider whom you are comfortable of working with because of a clear alignment in values, purpose and vision.