5 Keys to Successful Outsourcing
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5 Keys to Successful Outsourcing

Posted by on Wednesday, May 7th, 2014  

 

In the world of consulting, one of the worst things I’ve heard going into an engagement with a client was, “I’ve already wasted a lot of time and money with that other company, I hope you can do better than them.”  This is really sad, but many times it’s the result of poor execution on both sides of the table.  Now before anyone throws a stone at me, read on to see how this can be true.

Understanding your own needs is the first part in determining who to use for your project.   Though many contractors have a breadth of knowledge in multiple areas, it can be difficult to determine which one to use if you’re not 100% sure of your need.  Knowing your specific needs can help you determine if you want a generalist contractor with a wide range of expertise or a highly skilled contractor with a narrowed focused expertise.

A project to convert your departments paper forms into digital/electronic forms may be completed by someone with a wide range of expertise; however, realigning two division and merging departments for a global company should probably be done by someone specifically keen to that level of effort.

Ideally, you should know your needs before you bring in someone else.  This leads to a key rule of business in my opinion and one that can save you on your next project.  Simply put, BE HONEST! For those hiring: be honest about your intentions, your needs, and your expectations.  If you need it done in two weeks, then let it be known up front.  For the contractors and consultants, sometimes being honest and admitting your skillset can seem backwards, but honesty always prevails.  If you have working knowledge but are not completely competent, be upfront about it and let them know.  Respect is often earned from honesty, but don’t be a fool.  There is such a thing as being too upfront, but within reason and uncommon sense, be upfront, it helps with expectations in the long run.

I have worked within many different industries and with various sized businesses so I know these keys are good for any outsourcing gigs you may be considering:

 

  1. Time is money

If you are hiring someone, it is just as much your responsibility to have sufficient resources for your project as it is the contractor or consultant coming in to have enough resources to assist.  You should ensure you or someone within your organization can devote the necessary amount of time daily and weekly to seeing the project through.  One sure way for most projects to fail, is to start and then abandon ship; hoping the contractor or consultant can bring it home the way you would and the best way to benefit your organization.

Tip: Setup a weekly meeting or dedicate at least 1 hour a week to meet with your project team.  Have open, candid conversations about tasking’s, deliverables, and milestones.  Keep it simple and brief, but ensure the doors of communication are there and open.

 

 

  1. Prevent Scope Creep

I have personally experienced this on both sides of the table and this can be very frustrating for all involved.   There isn’t any blame because both parties are responsible for this.  If you do not establish what is within scope and out of scope, anything (and usually everything) is up for grabs.  The things that sting the most for contractors’ or consultants’ are fixed priced bids, but even time and materials can get out of hand if you’re not careful.  Make sure you get documented signoff by all parties involved on the scope and the task/deliverables that will ensure it is met.

Tip: Plan for the unexpected, and build in a cushion of dollars/time just in case something happens.  If you don’t already have a change order process, put one together and work with your consultant or contractors to ensure it fits right within your project team.  As always be honest and upfront.

 

 

  1. Plan, plan and plan some more

Just as you’ve heard in business or real estate – location, location, location; so it is with outsourcing – plan, plan, plan. Without a plan, your resource is just as clueless as you are in what you need.  The really bad aspect of that is the fact that they are usually more expensive than you are for your budgets which further validates key #1.  Unless you’ve hired someone specifically to help you set the strategy and direction of the project, it’s best you figure it out before bringing them in.  However, you should plan some wiggle room for change as well which supports key #2.  Since they are the experts, they should be able to take your plan and clean it up in some areas making sure you get what you really need and not just some end result.  Essentially, have direction before you bring them in because unless you have lots of money, you can’t afford them to be clueless.

Tip: Set an internal goal, outcome, and expectation of how you think it should be achieved.  Have the consultant or contractors review that and modify it as needed before the project starts and ensure the plan is profitable and achievable for both sides before you commit to it.

 

 

  1. Ask around if you’re unsure

While working with someone you know is great, sometimes ensuring the most competent resource far outweighs finding the best deal.  In most areas, the best value often times costs a little bit more, but you do get what you pay for.  Even if you know who you are going with, ask for references from others to ensure that you haven’t missed any requirements or aren’t rushing the process.  Even the people you are going with will appreciate the extra due diligence to clearly define the project and your needs before they are brought in.

Tip: If possible, ask for past performance reports or references to see how well your intended consultant or contractor can handle your work.  Unless you have a dire emergency, taking an extra day to award work doesn’t compare to the frustrations of having to firing a contractor because of poor performance.

 

 

  1. Praise heartily and pay on time

These two should go without much saying.  For the consultant or contractors coming in, your project at that moment is helping pay their mortgage, insurance, gas, food, or whatever other bills they have.  Put yourself in their shoes.  While it is understandable to work a NET30 or NET45, if you can, be prompt.  Also, praising or communicating your appreciation for a job well done goes a long way.  Write a recommendation for them, or let others know how they helped you during your crisis.  As the customer, you expect your deliverables to be done on time, and as the provider, they also expect to be paid on time.  It’s a common courtesy and we shouldn’t stop there.  Look up their LinkedIn profile, or submit a testimonial on their website.  If they did good work, let others know about it, that can help further their business, but also can ensure they will do something extra for you the next time around.

Tip: Devote 30 minutes to writing a thank you letter or a good review on their blog or website and put your name on it.  Nothing spells out trust and appreciation more than that, and it could also be a good referral source for your business as well.

So the next time you are considering outsourcing some work for anything, please remember that time is money, keep your scope in perspective, make sure you have a plan, get a second opinion, and pay on time.  If you have any thoughts or experiences to add to this list, please leave a comment and follow key #5.

 

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