10 Steps to Outsourcing Success

Attempting to outsource or offshore your business functions without a plan, is like trying to cook a seven-course meal with nothing more than a camp stove and single fry pan.
It’s not going to be easy.

10 steps to outsourcing success

According to research and advisory company, Gartner, the planning phase is the most crucial to ensuring outsourcing success. Businesses that take the time to strategize fare better when it comes to savings and efficiency.

To help your journey into outsourcing run as smoothly as possible, Gartner identified 10 key steps every business should follow. When done correctly, each will deliver a tangible result, moving you a step closer to successfully outsourcing.

Follow these 10 strategies for successful outsourcing

  1. Lay down the rules and set outsourcing goals

    The decision to outsource is likely taken by your whole managerial team. With a few cooks in the kitchen, each person may have a different ideas about the motivations for outsourcing and how to do it.

    Get everyone on the same page by considering your overall goal.

    • Do you want to cut costs?
    • Will outsourcing help with scaling faster?
    • Is it about remaining competitive in a global market?
    • Or even improving efficiency and service quality for consumers?

    With your end goal clearly defined, you’re more likely to save valuable time and energy.

  2. Evaluate your existing infrastructure

    Looking at current ‘as is’ business processes will identify the areas that will benefit most from outsourcing. As suggested by Gartner, this involves assessing existing internal and external capabilities, running costs, service performance, and any provider contracts already in place.

    Collating this information helps you and your team see whether your existing processes meet customer demands and whether the infrastructure needs upgrading. If upgrades are needed, can the current infrastructure support these upgrades?

    If not, the question is then, “How can we get the business ready to support any changes to our processes we choose to make?” One option is starting small — offshoring just a few key roles and functions — and then gradually transition.

  3. Tackling offshore team management

    Knowledge and skill in managing outsourced processes are vital in making the shift to outsourcing. Are you and your company executives ready for the responsibility? A few things to consider:

    • How you’ll recruit and hire the right people for your offshore team.
    • Educating offshore employees about your business and culture.
    • Setting clear responsibilities and KPIs.
    • Communication between onshore and offshore teams for greater unity.

    The benefits of offshoring can deliver great results for your business. But achieving these requires careful management and time investment.

  4. Identify barriers, challenges and advantages

    Outsourcing that costs your business time and money without returning results is the last thing you want.

    Take a wider view of what could help or hinder your outsourcing move. Labor laws, government support, advancements in technology, the current economy, and internal organizational guidelines could present blockers and challenges that need solutions. During this research stage you’re also likely to identify the most relevant advantages outsourcing can bring to your business.

  5. Measure processes and find gaps

    It’s time to compare your current data with projected data. Measurements from existing processes can be evaluated and make a case for and against outsourcing. Compare your ‘as is’ current model data, with the needs and objectives of your future model and, as Gartner suggests, “measure these as much as possible”. The findings will help guide the approaches your organization could take to plug any gaps.

  6. Know the outsourcing market

    Before partnering with a provider, familiarize yourself with the four different outsourcing models. Decide which best suits your business’ need and seek the help of a provider offering that model.

    With suitable providers identified, look at their client track record, cost and successful outsourcing service bids.

  7. Plan multiple scenarios

    A single, robust plan is composed of many smaller plans. This step of your outsourcing strategy involves looking at every scenario — all the things that could go right or wrong — in terms of systems, processes and implementation. Sound each one out with your team.

  8. Carry out risk assessments

    Next, for every scenario, assess the potential damage identified risks could cause your business. This could be legal risk, related to tools and technology, economical factors in your offshoring location, or even environmental concerns. Once identified, the question then becomes how do you, your team and future outsourcing provider, convert these risks into opportunities?

  9. Write your business plan

    With all the information collated, it’s time to clearly state your case for outsourcing by writing and presenting your business plan.

    Document all of your findings from each strategy step, making sure you include all of the following:

    • Total Cost of Sourcing (TCS)

    • all scenarios

    • Workloads

    • financial impact

    • goals and evolution

    • suggested timeline

  10. Create your action blueprint

    Once the business plan is approved, the final step is creating the blueprint. This is where you set hard deadlines for implementation, assign budget, and identify the necessary deals and relationships needed.

Details are everything

By following these strategy steps, you should be able to clearly articulate when, how and why your business needs to outsource or offshore functions. You might feel overwhelmed by all the information you’ve gathered and tasks outlined, but if you break it down and are able to see the mid-long term benefits of outsourcing, it will be manageable and successful.  

Which outsourcing destination will you choose?

The Philippines is one of the top outsourcing locations in the world, and with good reason. To learn more about the exceptional workforce and talent available in the Philippines, read this blog.