From reduced costs to simplified corporate structuring, outsourcing comes with a world of benefits. One of the most common reasons that companies are reluctant to use it, however, is simply because they are afraid of entering into the unknown. How can you spot a bad outsourcing company? The signs are there if you know what to look for, and if you do find the right firm you could potentially save your company a huge amount of money. The IAOP (International Association of Outsourcing Professionals) has established categories by which these companies can be rated.

Cost can be a primary issue – if the firm is not offering the service you want at a price you are willing to pay, then you cannot come to an agreement. However, once you’ve hired a firm, you might discover that you struggle to communicate with them or that they deliver poor material, behind schedule at above agreed costs. It’s even better to spot the warning signs before you’ve begun your commercial relationship. The best thing you can do is to thoroughly research the company you plan to employ.

A lack of growth is a sure sign that you aren’t looking at a good company. Development and production always follow growth – and if you want to work with a capable, innovative company, then one that is on the rise is the right choice. Something else to look for is the number of references that are available. A good outsourcing company has plenty of them. So, naturally, a bad one will have very few to none at all. There are also quality factors, such as recognition received for accomplishments. A poor company won’t have any awards or certificates to show. In addition, there won’t be any type of information available at all unless they are brand new. A press release or article on behalf of an outsourcing company indicates that they have some value. This is why poor outsourcing enterprises have very little in the way of written ratings of their services. Finally, the management should be able to withstand scrutiny. Failure to do so indicates that the leaders aren’t effective in their roles and should be avoided – they don’t know the proper ways to boost their profile. This will show up quickly when dealing with clients who might be interested in their services.

Once you’ve established that you’re comfortable working with a firm, you need to test them to ensure that they can meet your requirements, before you need to rely on them. Give them a series of challenging but limited tasks, with clear instructions and give them a very definite time limit. By evaluating the results of a test before fully committing to a particular company, you can have a much better idea of their capabilities and of the qualities of specific members of staff.

There are many outsourcing companies trying to get a piece of the action. However, it should be easy to differentiate the good ones from the bad by using the tips above. Time means money and you have to be able to spot a bad investment straight away.

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