Ask These Questions Before Locally Outsourcing

If you are considering making the switch to outsourcing, then you know it can be a challenging decision. You have to honestly assess your business and its current capabilities, be proactive about your goals and think long term. All this before you decide to outsource. One factor you won’t have to consider however, is outsourcing overseas. Long gone are the days when outsourcing meant relocating entire functions abroad. Today, you can find someone in your own backyard to outsource to.

Once you’ve finalized which services to outsource, whether it’s accounting, finance, human resources, IT, social media management or legal, the next step is to carefully consider which partner to use. Not all outsourced service providers are equal, and you want to make sure that whoever you choose to partner with has the same values and quality you offer to your clients. Before you outsource your functions to a local company, ask some relevant questions.

Industry Experience

Many business owners who outsource find a partner with the right technical skills, but forget to ask an important question about industry knowledge and experience. You want to outsource to someone who has some knowledge of your industry, so they can deal with any intricacies due to tax implications, regulations, and manufacturing cycles, just to name some examples. Without that knowledge, an outsourced partner will not be able to best serve your organization.

Financial Health

Remember to pay attention to any potential outsourced partners’ financial history. It can be easy to overlook. Ideally, you will be able to outsource to an established service provider, but what if you want to work with a small start up that has the skills you’re looking for? Or a company you know nothing about. If they shut their doors on a random day, without notice, it will adversely affect your business and workflow. This is why it’s critical for you to have an understanding of their financial position, including profitability, cash flow and liquidity.

Account Management

When you’re in negotiations with an outsourcing partner, it’s crucial to find out who will be managing your account. Do they have a clearly defined account management process? Is there going to be one individual responsible for your account, or will there be a team? Will you be able to meet the account manager? Do account managers tend to be pulled off one account onto another often? Maybe you will be dealing with a call center. The key is getting the information upfront, so you can make an effective decision, and are not surprised halfway through your contract.

Security Measures

Whether you are outsourcing HR work, legal work, or accounting, the information you provide your outsourced partner is confidential to you. It may also include information on your clients and business processes. Therefore, privacy and data security is a huge issue, and must be taken into consideration when choosing a vendor. Some basic questions to ask are:

  • How they protect their facility from intrusion;
  • How they protect their data; and
  • How they protect their customers’ data.

Should there be a data breach, do they have a data recovery plan? And a business continuity plan? Will your data be stored in the Cloud? How much access do their employees have to your data?

Client References

Ask to contact current and former clients, and ask about the outsourced company’s strengths. Be sure to touch on those areas that are critically important to the success of your organization. Keep your ears open for any areas of concern and ask follow up questions.

Finally, interviewing multiple companies before deciding who to retain is a smart idea. It’s similar to hiring an employee. You wouldn’t hire the first one through the door. Also, while price is important for everyone, in some industries, you get only what you pay for and nothing more. Price should not be the only consideration. Ensure you are clear on which party is responsible for doing what, and have it incorporated clearly in the service agreement. Once you’re sure you’re choosing the right partner, let them handle the work and concentrate on what you do best. You’ll find that outsourcing can be a strategic tool which will go on to offer you efficiency, convenience as well as savings.

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