The Keys to Creating that Great Outsourcing Relationship

Once you have a notion to start outsourcing a project or certain tasks, the first primary goals should be 1) selecting an appropriate provider, and then 2) fostering a sound relationship with that outsourcing company. Research tells us that the customer is as important as the outsourcer when it comes to a successful relationship. Therefore, we shouldn’t only count on a third-party company but instead involve ourselves in the process (at each and every juncture). Let’s look at a few pointers in making that investment work.

Consider what the provider is best at. You chose this company for what they can do for you in a certain sphere. Focus them on that specific area, as otherwise they might get distracted and lose effectiveness. This may sound easier than actually doing it, as many customers start with one task but then quickly begin dumping other work on the provider. In other words, don’t judge your provider by the volume but by the value they provide in certain areas.

Create the proper framework from the outset. You cannot build a durable product without first having a solid foundation to build on. Get this done before approaching the outsourcer. Not only does it lead to better results, it shows them that you truly mean business (and expect results). Utilizing this framework, you can then follow it up with deciding the pros and cons of every service, function and strategy.

Have some vision regarding staff & roles that will be needed. When to hire, who does what, creating commitment, key motivators, and integrating people into project goals. All of these should be thought out with a clear mind and good people management – not only functions but what pulls people together as a viable team. Regarding outsourcing to a foreign country, many believe that starting your own business center is a surefire way to get your team personally involved in the product, while building up your brand overseas, as with offshoring (compared to just outsourcing) you have your personal business center, brand, and team.

A good example of this can be seen in the Alcor Model which offers key support for office search, HR payroll, recruitment, accounting, procurements, or legal compliance in Ukraine.

Treat the outsourcer as a key partner. If you develop a relationship based solely on the needs of today, without thinking further down the road, then that is what you’ll get: a vendor who is less committed to you (besides what they can get in the short-run). Therefore, think more long-term and nurture the relationship as you would with any key partner. Speak to them of further possibilities and future projects; in this way they will see you as a client that they wish to foster, and this has better potential for a win-win situation.   

Be reasonable about the price. Just as you wish to get cost-savings, the provider desires to see profit. If they only kowtow to your pressure for getting the best price, they might also enter the project somewhat grudgingly, or even worse: sparingly (as in not giving themselves 100% to its successful completion). You may need to give a bit more in the beginning, to get more later on. Stay flexible and find a happy medium.

Start with a sound contract. This is not just a piece of paper, but the guidelines that will need to be followed by both sides of the agreement. Pass it back and forth until all stakeholders have a clear grasp of all that needs to get done: the how’s, what’s & where’s. A good contract is assurance that everyone understands their responsibilities in the coming weeks or months; therefore, be sure the essentials are clearly articulated and in agreement by all involved.

And lastly, but highly important, is to manage your side of the bargain accordingly. Show the provider that you carry out your responsibilities in a professional and caring way, be sure your staff deal with the vendor in an open and transparent fashion, and while maintaining that those agreed-upon items are being delivered, don’t get too much into “micromanaging” them – after all, you hired them for their expertise, so let them handle the how’s. 

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