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April 2019 | Outsourcing Blog | BPO Industry Updates and Articles

Tips for Managing an Outsourcing Contract

by: Sidney Liquigan

Tuesday, April 30, 2019 | Comments (0)

Category: Outsourcing Research / Trends

An outsourcing contract should create value for both the client and the outsourcing company. After discussions, agreements, and sign-offs have been made, the project is now turned over to the outsourced team. And typically, not everyone is involved or understands what went on during the agreement process. Thus, this may result in misinterpretation, miscommunication, and objectives and goals not being met.

To achieve successful outsourcing, here are some outsourcing management tips and best practices that both client and provider should consider.

Designate a Point of Contact

At the start of the engagement, there should be designated contact persons for both parties. By having one person to represent the client and the outsourcing provider, respectively, inconsistency and uncertainty will be avoided. This also lets the outsourcing provider know right away who to consult and ask for approval from. Make sure that the points of contact for both ends are people who know and understand all the requirements and the procedures, systems, and policies that are agreed on by both parties.

Document Issues and Requests

Outsourcing requires collaboration between the client and the provider. When the customer doesn't immediately fulfill their obligations, this could be an excuse for the outsourcing provider for underperformance. Make it part of the contract to require the provider to keep a record of the issues, as well as requests for action from the customer. It helps if there is a ticketing system where employees could file the issue and request action from the concerned person or department. The system could also help in keeping track of the status of the issues—whether they're still pending or already resolved.

Everything must be Specified Clearly

Before commencing the outsourcing contract, make sure that the terms are clear to both parties. To guarantee that all requirements and objectives are met, the contract must explicitly state all the details clearly, including the roles and responsibilities of each party. This is also the stage where those involved should already clarify anything that's unclear to them.

Monitor and Evaluate Progress

Outsourcing customers must establish KPIs to help them assess the performance of their outsourcing partner. Set deadlines, timelines, and milestones to keep track of progress and observe how objectives are achieved, as well as to see how the communication and collaboration between client and provider are working.

Control the Changes

While outsourcing means delegating a provider you can trust to take the task off your hands, it's still important to have a change control process that both parties understand and have agreed to. This means that when the provider recommends some changes in the contract, it must undergo the change control process and not just rely on trust alone. The changes must be reviewed, discussed, and documented.

Medical billing is a complex process that demands time and attention that could have been used to focus on your main business functions. And you could do just that when you outsource your medical billing to experienced outsourcing providers. However, before outsourcing your medical billing, it is important to consider the pros and cons, which could help you make a decision whether or not medical billing outsourcing is right for you.


  1. Better Patient Experience
    With the medical billing tasks now out of your way, you can now concentrate on providing better service to your customers, especially on providing quality care for patients.
  2. Minimized Errors
    Outsourcing to professional medical billers ensures that the job will be done more efficiently and accurately, thus minimizing billing errors. This then reduces the number of rejected and denied medical claims.
  3. Improved Cash Flow
    Billing interruptions can occur when your in-house medical biller goes on vacation or when delays are caused by an insufficient number of employees. Outsourcing your medical billing ensures that there's always staff to handle it and your reimbursements are always on time, thus resulting in steady cash flow.
  4. Up-to-Date Compliance Obligations
    Constant changes in insurance companies and third-party payers make it challenging for healthcare providers to keep up with different requirements and regulations. An outsourced medical billing team has all the resources, skills, and knowledge to maintain compliance. It is part of their job to monitor the changes so you don't have to.
  5. Increased Revenue
    With knowledgeable and experienced medical billing staff using innovative technology—all that at lower labor costs, healthcare businesses get to spend more on improving their services. This leads to patients becoming more satisfied, causing the business to gain higher profit.
  6. Transparency
    Outsourcing providers are all about efficiency. To keep you on track, your medical billing outsourcing partner will provide you regularly with performance reports. You also get access to online dashboards and other systems so that you have visibility into your outsourced medical billing operations.


  1. Loss of Control
    One of the most common reasons why medical businesses are hesitant to outsource is their lack of direct control over the outsourced medical billing staff. Managers are in charge of the revenue cycle, accounts receivables, and financial management, among others, so they feel vulnerable for not being able to directly supervise the outsourced function.
  2. No Onsite Representative
    Some patients prefer to make their payment or inquire about their bill in person instead of online or over the phone. Not having onsite medical billing staff to entertain walk-in customers may affect patient satisfaction.
  3. Privacy and Security Concerns
    Healthcare businesses are also concerned about the potential risks to their HIPAA compliance and data security. With the transactions being done online and data being kept remotely, not only are outsourced medical billing teams vulnerable to physical risks, but to digital risks as well.
  4. Limitations
    Patient records and other information may be more easily available to in-house medical billing staff compared to a remote team that may not have all the information immediately available to them.

Mitigate the Cons with MicroSourcing Managed Operations Outsourcing

Weigh your options before making a decision. However, know that everything has pros and cons; you just need to study each one carefully to understand what will work best for your business. The disadvantages presented above can be mitigated, and even avoided, if you plan properly and partner with a reputable outsourcing provider that has all the requirements you need.

While many businesses enjoy the benefits of outsourcing, there will also be those who are hesitant. One of their concerns is having to hand over the control of their operations to the outsourcing provider. With managed operations outsourcing, it's still like running your own business operations but with all the advantages of outsourcing. It will be up to you to decide the level of control you will share with your managed operations provider.

MicroSourcing is a managed operations provider in the Philippines, which offers flexible arrangements that can be integrated if you already have an existing medical billing system or process. We host and manage HIPAA and PCI-DSS compliant operators, and we are certified for ISO/IEC 27001:2013 (Information Security Management System) and ISO 9001:2015 (Quality Management System).

Back office tasks are essential for a business to function efficiently. But for businesses to focus on customer-facing roles and core functions, back office tasks can be outsourced to offshore providers. But along with the many benefits that back office outsourcing can bring, it can also fail and cause damage to your business if it is not planned and managed properly.

As you plan to outsource back office tasks, take note of these key factors to consider.

What Your Team Thinks

It is important that everyone on your team is aware of your outsourcing plans. Discuss it with them and encourage them to share their insights, suggestions, and opinions. Explain to them why the company needs to outsource back office tasks and how this could be beneficial for the business and the team.

Which Back Office Tasks to Outsource

Your approach to outsourcing depends on your business' needs and priorities. To help you identify which back office tasks you should outsource, ask yourself: what are the specialized skills or resources that you don't have in-house? What are the tasks that take so much of your time, yet are not value-generating? How will outsourcing impact your existing workflow?

The Transition

Choose a provider that can give you professional advice not only on outsourcing back office work, but also on the effective turnover of knowledge or information and work to the chosen outsourcing partner. Prepare a transition plan together with your outsourcing partner to ensure a smooth turnover.

Preparing for Risks

All decisions come with risks, but they can be prevented when you are prepared for them. Collaborate with your outsourcing partner on identifying the kinds of risks and scenarios that may come up, whether financial, legal, or commercial, in outsourcing your back office tasks and create plans on how they can be mitigated.

One-Stop Shop

Many outsourcing companies, including MicroSourcing, have the experience and resources to handle different types of back office work, among other outsourcing services. Outsource to a single company that has all the services you need for more convenient monitoring of progress and performance.

Strong Communication

Partner with an outsourcing company that you can be sure you can reach easily. Since you won't be working in the same location, it is important to make sure that you will have regular contact with your outsourcing partner. And to establish effective communication, ensure that your outsourced staff speaks and understands your language. This also includes understanding your terminologies and culture.

Information Security

Back office tasks involve a lot of paperwork and data; ensure that you choose an outsourcing partner that follows data protection policies and has information security systems and processes that are compliant to international standards and regulations. Also consider getting a written and signed agreement on complete data confidentiality.

For your business to grow and keep moving, it is necessary to focus on the tasks that are revenue-generating. But this can be challenging if you try to wear many hats just to keep your business running. There are time-consuming business tasks that are better outsourced to providers that can be trusted to take these tasks out of your hands.

Human Resources

Besides managing compensation and benefits, employee engagement, and employee retention, it is also the responsibility of the HR team to create a sound employee policy as well as keep up with the demands of the ever-changing HR standards and regulations. Outsourcing your HR to more qualified HR specialists will significantly lighten your load and will help manage your employees' needs more effectively.


Payroll tasks are critical and time-sensitive. Ensure that your employees are paid on time and with the correct calculations by outsourcing your payroll to trained professionals. Aside from saving money on eliminated overhead costs and lower labor costs, you also save time on training, as well as on the processing of payroll because these providers have the software and systems to get the job done seamlessly.


The financial aspects of your business must be handled with accuracy and urgency. More than just tracking and processing financial information and making accurate calculations, your accounting department should also be savvy with financial laws and tax policies. Outsource your accounting to professional, certified accountants for your peace of mind.

Customer Support

Providing excellent customer support 24/7 ensures customer satisfaction, which then contributes to a successful business. To make sure that your customers are taken care of all throughout their journey with your business, outsource to a customer support provider that is experienced in this field. This ensures a consistent, high-quality customer service.

Digital Marketing

Promoting your business and your website online takes time and requires strategy. This includes SEO, social media management and marketing, email marketing, and banner ads. Make sure to get measurable results by outsourcing your digital marketing to experts.

Creative Tasks

Creative tasks include graphic design and content creation for your communication materials, as well as developing your branding and identity. Building or updating your website also involve creative tasks, such as web design and content writing and management. These kinds of tasks can be outsourced to a creative agency. When you are busy running your business, these tasks can be easily overlooked. Creative tasks also require specific skills that a typical office may not have. It's better to outsource these kinds of tasks as it won't be necessary to hire permanent in-house staff for them.

Data Management

From data entry to data processing to maintaining records and handling backup and recovery, data management eats a lot of your time and can be boring and repetitive. But there are people who excel at these tasks and outsourcing companies that have the software and systems that simplify the process.

Admin Tasks

Everyday admin tasks can take your time and attention away from core processes. It's either you ignore those emails and focus on revenue-generating activities, or get bogged down by emails and other small tasks and have no more time for your main job. Outsourcing admin support will not only save you time, but it will also save you money as you only pay for the hours rendered, compared to hiring a full-time assistant.