Outsourcing can be a means to reduce costs, improve service and gain a new perspective on best business practice. Outsourcing business functions and operations really is a cost effective way to bring fresh new ideas to problems and to compliment a company’s existing commercial know-how. It frees up valuable time and resources. Along the way, companies are able to reduce their fixed and variable costs while improving their bottom line. The best companies endorse a practice of working alongside their outsourcing partner to amalgamate each party’s best attributes. Outsourcing firms are then able to concentrate on bringing value, improving service and offering a counterbalance to ideas and approaches. Given the benefits of outsourcing, how can companies improve and build upon their long-term relationship?
Identify core competencies of the outsourcing firm Companies that decide to use an outsourcing firm must make sure to transfer ownership and responsibilities of the business function they choose to outsource. If the company chooses to use a marketing outsourcing firm, then it must be determined which functions the marketing firm will be responsible for. Will it be lead generation, sales, growing market share or something else? Identifying the core competencies of the outsourcing firm is the first step.
Don’t duplicate efforts and time The second important step is to ensure that the company never duplicates work. This involves the complete transfer of ownership of a given function. Again, outsourcing saves companies a tremendous amount of time and resources. This is only possible if the company ensures there is no duplicated work. Otherwise the savings will never be realized.
Measure results and build on progress Essential to improving the long-term relationship with the outsourcing firm is ensuring that both parties are made fully aware of how progress, or the lack thereof, will be measured. A good rule of thumb is to schedule performance appraisals and review periods where both parties can assess the results of given approaches and action plans.
Getting the most out of an outsourcing firm involves ensuring both parties are aware of their respective roles and responsibilities. Complimenting each party’s core competencies will further improve the long-term relationship. Finally, measuring results and building on progress allows both to have clearly defined goals.