Here’s a little secret… It’s all in the terms of your agreement, the service providers you select and the country they’re located in.

The popularity of outsourcing in recent years has lead to an increase in service providers worldwide. Today, you have greater choices than ever. But a successful outsourcing partnership hangs on the efficiency of the service providers you use, a clearly defined outsourcing agreement and a competitive offshore location.

At Global Outsourcing, we believe there are 6 stages to securing a successful outsourcing partnership:

1. Communicate your requirements

There are 3 methods we use to communicate your outsourcing requirements to potential providers:

A prequalification letter that lays out your basic expectations A RFI (request for information), which tends to delve deeper than option 1 A RFP (request for proposal), which is the most popular of the three. This is sent to only a few providers who’ve already qualified through a previous selection process

2. Identify ‘best fit’ service providers

Part of this process is made easier because we have existing relationships with service providers who consistently meet the standards we expect. We’ve already identified the top performers and can recommend which providers have the capabilities your business requires. This saves an incredible amount of our clients’ time and money during the selection process.

3. Secure a match

To single out the service providers that can deliver what you need, we evaluate their capabilities using a scoring system of 1 (poor) to 5 (best). We can then use these scores to give each provider an overall ranking.

Some of the things we measure using the scorecard include:

Competencies as reflected in the provider’s people, processes and technology.

Capabilities in terms of the provider’s financial strength, infrastructure, management systems and services.

Relationship dynamics, which are influenced by many things including a provider’s culture, mission and strategy. Also its relative size, flexibility of business dealings and the importance it places on the relationship with a particular partnership.

4. Select an offshore location

Several countries have emerged as leading destinations for offshoring, including:

India (probably the best known and most widely used country for offshoring)

China

Philippines

Malaysia

Taiwan

Korea

Vietnam

Indonesia

We believe the Philippines offers the biggest potential for Australian businesses. There are a few reasons for this:

Only 2 hours behind Australia (EST)

Third largest English speaking country

Strong western influence (they get us)

200,000 students graduating from university each year

Low average income offering huge savings in labour

Friendly, enthusiastic work attitude

Tax incentives for BPO providers

We navigate many of the hurdles that arise when dealing with remote locations by offering local support. This way, you have face-to-face access to outsourcing specialists who can help manage your offshore relationship, give you feedback on performance, recommend solutions to any problems that arise and assist with supplier changes if needed.

5. The outsourcing contract

Your outsourcing contract is critical because it guides your provider’s every move. Your contract should capture:

The intent of your relationship

How your relationship will be managed

Which services will be performed

The responsibilities of both parties involved

How results will be measured

The payment and compensation terms

Most outsourcing contracts include 3 sections: a contract terms section, a scope services section and a pricing section.

6. Have an exit strategy

Terminating an outsourcing contract can be tricky if the terms aren’t clearly addressed in your contract. Typically, there are a few reasons why a termination might occur:

Because a contractual term has been violated

A termination of convenience (this is more difficult to negotiate because there’s no specific violation or cause)

Due to an out of control influence or factor. We call this type of termination ‘for jeopardy’

No matter the reason, it’s important to decide what cause of action will take place after termination. The most common actions tend to be:

Returning outsourced services in-house

Engaging a different service provider

Abandoning the outsourced service altogether

We make sure we have a clear perspective from both our client and the outsourcing provider to negotiate a termination strategy that suits both parties. This includes deciding how staff, equipment, documentation and physical assets will be disposed.

If you’re exploring the option of outsourcing for your business, but you’re not sure where to start, one of our consultants will be happy to answer your questions and discuss your needs.

Get in touch today.