Outsourcing has proved a boon to many companies. However, there are some inherent problems, which can be avoided if one employed some care. The vendor-outsourcer relation is meant to be a long-term one. It should be mutually beneficial.
The outsourcer should exercise great care while engaging a vendor. This task will largely determine the success of the partnership. The task may be entrusted to a consulting company or be done in-house. In the latter, the outsourcer can form a team to select the vendor.
First shortlist probable candidates and brief them clearly of your expectations. Expectations have to be realistic and achievable. This will in turn help the service provider to assess whether it can measure up to those expectations.
Provide enough information to the prospective service provider with regard to the scope of the relationship, the time- frame, and the price that you are offering in return for the service.
Seek clarifications from the prospective vendors on any issue that you think is vague.
Ask the prospective vendor to provide references of clients they have served. Get in touch with these clients and seek their opinion.
The client company should keep in the mind the technical know- how and expertise available with the vendor. Experience is also a factor that should be considered.
Pricing or the cost factor largely determines the success of outsourcing. However, a low cost factor alone should not be the criterion for selection. The quality of service has a great impact on the success of client.
The politics of the region in which the service provider is operating should be conducive too.
Legal issues and labor laws, taxation policies all have a major role in determining the success of outsourcing.
When the process of engaging a service provider is over, a special board should be formed which would handle and manage the outsourcing aspect. This board will formulate strategies and communicate decisions to the vendor.
The terms and condition of the relationship should be mutually agreed and written down so there is no confusion or vagueness.
It would be better for the client to entrust a small project to the service provider initially. This will reduce the extent of risk and give a fair idea of how well the service provider is going to perform.
It will be necessary to evaluate the progress of the operations from time to time. Discussions and meetings should focus on the goals achieved and those yet to be achieved. New strategies may have to be chalked out, to meet specific goals
In some cases, the client's expectations are met or even exceeded- in such situations the service provider should be amply awarded. If, on the other hand, the vendor fails to deliver on its promise, then it should be penalized.
The vendor performs specialized operations .To keep up its market competitiveness the employees of the vendor may need training to
spruce up their skill. It will be in the client company's interest to ensure and provide training.
Cultural differences are likely especially when it comes to offshore outsourcing. The relationship between the outsourcer and the service provider is best served when these differences are identified, understood and respected. Programmes to bridge the gap should be held where both sides can come closer.
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