In its simplest form, outsourcing areas of your business is just another way of delegating. And in most cases, outsourcing externally or overseas will save you money, free up your time, whilst giving you access to untapped talent and expertise without the burden of recruitment investment. If you’re thinking about outsourcing a role or a department to another part of the world, here are the questions you should be asking.
What is the pricing structure?
One of the main benefits of outsourcing or offshoring is the cost savings that can be made. So it’s important to be clear on the pricing structure and always double check that there are no hidden costs involved in contracting overseas.
What processes are in place to ensure cost efficiency?
Outsourcing abroad is a great way of increasing profit margins and lowering expenditure on labour and operational costs. But leaving internal processes in the hands of a third party can mean that day to day efficiency isn’t something you can control. So make sure you have the necessary discussions to ensure that your chosen company is helping you reduce costs as much as possible.
What are the plans for effective communication?
Clear communication is essential when liaising with partners / suppliers overseas. It’s important to consider any language barriers, time zone differences, expectations, and the cultural differences that may impact on your relationship. Establish a route of communication before you sign over the contract.
How will you measure performance?
Whether you’re offshoring your manufacturing efforts or deploying an IT team overseas, it’s essential that you establish KPIs. Not only will this provide targets to work towards, but it will also help you stay on track with how well your outsourced team are doing. Allowing you to reward good work and reflect on the areas that need improvement.
What are the working hours?
Taking into consideration the time difference, devise a schedule of official working hours so you can effectively communicate and collaborate when necessary.
Who is the main contact / account handler?
Having a representative from both ends is the best way to ensure that communications run smoothly and efficiently. Choose a company with a dedicated account manager who can look after your needs and be your first port of call every time you need something handling.
What is the process of quality control?
QC management is something that varies greatly from country to country, especially in product manufacturing. So be sure to ask about quality control and how it is executed.
What are the laws on nondisclosure or confidentiality agreements?
Some countries do not recognise confidentiality or non-compete agreements, so always take into consideration the country’s own laws. This is particularly important if workers will be handling sensitive company information.
What are the rules with contract termination?
Whilst you want your partnership to run smoothly, the process of terminating the contract is something you need to talk about. Consider adding a provision for performance expectations – this way, both parties understand what equates to a breach of contract.
What is the commitment to Corporate Social Responsibility?
Working with a company that doesn’t do business responsibly could damage your brand reputation through association alone. Corporate Social Responsibility (CSR) includes care for the environment and promoting a fair working environment for staff. Make sure you ask about these elements of their business in order to live up to your own responsible standards.