For decades, many global companies have taken advantage of outsourcing. Whether it’s to save time, keep labor costs down, or move production processes abroad, outsourcing makes it possible for businesses to grow steadily while maintaining a high level of productivity and operational efficiency.
While outsourcing has been a successful strategy for many companies, others have struggled to reap its benefits, often with undesired results.
So, what are the things you need to consider before outsourcing business operations? To help you get started, here are 10 outsourcing tips to remember:
1. Know What You Want and Need
Not all services across all industries can be outsourced. Therefore, understanding how your business works is crucial. You will need to know which second-hand processes can be delegated to third parties and which ones should be retained in-house. Here are the most commonly outsourced departments and functions:
2. Make an Action Plan
After identifying which processes can be turned over, the next step is to plan your outsourcing strategy. This includes careful planning and allocation of available resources, as well as assessing costs, risks, and long-term benefits. You will also need to identify reliable suppliers and vendors to ensure the success of your strategy.
3. Draw Up A Budget
Speaking of action plans, creating (and sticking to) a budget is one thing you must not forget when outsourcing business operations. To financially prepare your company for outsourcing, keep in mind these three tips:
- Research Average Salaries: In the Philippines, business process outsourcing (BPO) employees earn between $3,240.68 USD and $9,524.96 USD a year, according to job search platform Jobyoda. However, these figures may vary depending on the role, working experience, and location.
For example, if you’re outsourcing graphic design, the annual cost of hiring a Filipino graphic designer at the junior level is $6,269.59 USD a year, whereas a senior graphic designer costs $12,662.63 USD. Some cities pay more, so be sure to factor in location-based salary differences in your budget.
- Understand Outsourcing Costs: Overlooking costs associated with outsourcing is a big outsourcing mistake. Expenses such as start-up and management fees and software solution costs can throw you off guard if you’re financially unprepared. Accounting for project complexity and scope, industry requirements, choice of pricing model, and other factors helps you set a realistic budget.
- Anticipate Unforeseen Expenses: Natural disasters, exchange rates, extra services, and poor performance can incur additional expenses. Anticipating hidden costs allows your business to stay afloat while ensuring you get the most ROI from outsourcing.
As a business owner, you need to be one step ahead of everything, including costs. Developing a budget allows you to assess the potential financial benefits and risks of outsourcing.
4. Vet External Vendors
No, we don’t mean choosing the cheapest or the most expensive offshore outsourcing companies. When evaluating potential outsourcing partners, you also need to consider these factors:
- Industry Knowledge and Experience: Does the BPO vendor excel in your industry? A potential BPO partner that has worked with businesses in a similar industry to your business is more likely to understand your needs and meet your expectations.
- Quality of Service Delivery: Check the vendor’s portfolio and case studies. The samples featured there give you a sneak peek of the employees’ quality of work as well as the impacts of their output.
- Reputation and Work Ethic: No client wants an outsourcing provider that delivers low-quality work and falls short of performance and turnaround time expectations. Look up reviews of the service provider or reach out to its clients, so you have a clearer picture of the company’s work ethic.
- Technical Knowhow: Is the offshore outsourcing partner knowledgeable about AI and new technology trends? Most companies (83%) said their business plans included prioritizing AI. If you’re one of these companies, finding an outsourcing provider that offers AI solutions could accelerate your business’s digital transformation.
Furthermore, consider working with an offshore outsourcing company that’s already proficient in your tools and software. For instance, if your finance and accounting department is using Wave Accounting, you’ll get more value from outsourcing accounting with an external provider that knows the said program inside and out.
- Goals and Values: Shared goals and values equate to fewer conflicts of interest and a stronger long-term relationship. Outsourcing is a long-term investment, so it’s best to discuss goals and values earlier before fully committing to the partnership.
Thoroughly vetting external providers may take time, but you’ll be rewarded with a partnership that aligns with your standards, goals, values, and expertise.
5. Start Small
Outsourcing your processes to an outsourced service provider won’t always go smoothly the first time. To effectively manage risks, you have to start small so you can easily keep tabs on everything. By doing so, you can objectively assess if your offshore processes are being done efficiently and effectively.
6. Conduct A Trial Period or Project
No matter how many client testimonials, case studies, and reviews you’ve read, it’s normal to feel uncertain about whether your outsourcing provider is truly the right fit for your business. Fortunately, most outsourcing companies accept trial periods or projects.
Much like a test task for employees, trial periods or projects let you see if your potential outsourcing partner can deliver on their promises with real results. Marketing claims can be deceiving, so a trial period takes off any rose-tinted view you may have of the company.
It also helps you pinpoint challenges, address any shortcomings, and make an informed decision before fully committing to the BPO provider.
7. Onboard Outsourced Employees
After you have formed a team of online workers, the next step is to get them onboarded and up to speed with your company culture. Everybody must be fully aware of their roles, including the results they have to deliver. This is done to avoid miscommunication, which can result in productivity issues and high turnover rates.
8. Invest in Training
If onboarding is all about making new employees feel that they’re an important part of the company, training, on the other hand, focuses more on the technical aspects of the job. It’s important to invest in training so that your team is fully equipped before they do their job. As a result, they will be able to deliver their output quickly and easily.
9. Practice Regular Communication
Communication is the foundation of effective outsourcing. Here’s what to do when onboarding offshore employees:
- Establish Communication Channels: Will you and your offshore team communicate on Slack or Microsoft Teams? Deciding which platform to use ensures alignment and smoother communication between internal and outsourced teams.
- Schedule Meetings: We recommend scheduling weekly meetings to report on everything that happened throughout the workweek — whether it’s a newly achieved milestone or downtimes due to technical issues. Use meetings as opportunities for feedback, so your team can improve their services.
By regularly communicating with your outsourced team, you can strengthen teamwork, address issues, and maintain optimal momentum on projects.
10. Make Your Offshore Team Feel Valued
There’s a reason why outsourcing partners market their teams as a “seamless extension” of in-house teams. In a nutshell, offshore employees are assets — not extra task-takers or disposable staff. But just like your in-house employees, outsourced staff need to be treated right, too.
Here’s how to value and respect your offshore team:
- Be Receptive to Feedback and New Ideas: Offshore employees may notice flaws in your processes or propose out-of-the-box ideas.
- Hold Them to A High Standard: If you expect your internal team to maintain high standards, you should also expect the same for your offshore employees. It’s all about equal treatment.
- Celebrate Wins: Outsourcing involves achieving long-term goals. When your offshore team has finally achieved a difficult milestone, acknowledge everyone’s hard work to boost their morale and motivate them to perform better.
Start Outsourcing Business Operations to KDCI Outsourcing
There are a plethora of outsourcing companies that can help your business flourish. If you need support in building an outsourced team, we recommend partnering with KDCI Outsourcing, a Pasig City-based BPO company.
We offer offshore staffing services for businesses that need specialized, cost-effective expertise, scalable solutions, and unparalleled operational efficiency. We have a diverse pool of outsourced employees in the fields of accounting and finance, customer service, property management, human resources, and more.
Choose KDCI Outsourcing
Our outsourcing services promise not just cost savings, but also faster turnaround times, higher revenue, enhanced customer experience, and stronger brand reputation.
Get ready to experience these benefits first-hand with KDCI Outsourcing. Get in touch with us ASAP, so we can design a customized outsourcing strategy just for you!
