Outsourcing: The Most Important Questions - RoseIndia
Outsourcing work is an important business decision that can make or mar your prospects. There are several questions and issues the company needs to address in the decision making process. Apart from integrity and efficiency, the client and the service provider should be able to establish an effective communication system. Here are some of the important components that help you to take the right decisions.
Reliability of the Vendor:The client needs to know how long the vendor has been in the business, how many employees they have and how sound their financial background is. In other words, the client should have as complete a picture as possible.
Quality: The vendor should ideally be able to provide references from previous/ current customers. They should also describe the quality assessment processes followed within the company. It is helpful if the vendor has certifications like ISO 9000, CMM etc from independent agencies.
Costs: Every client wants the outsourced work to be cost effective. Check on the hidden costs from maintenance, training, infrastructure and so on.
Ability to Meet Deadlines: Take care that you are entering a realistic agreement with the vendor on deadlines and that the terms do not cause quality to go down.
Data Security: This is an important concern in the current times of internet hacking. Check on the security measures the vendor has adopted, like firewalls, access control systems, data encryption and so on. Also have a clear picture of the security checking the vendor adopts in terms of human resources- like pre-recruitment verification and non-disclosure agreements.
Risk Mitigation: Does the vendor have a thorough system of business continuity/ disaster recovery? What are their risk mitigation procedures? Choose a vendor who minimizes business risks with a proper plan.
Employee Attrition: How well equipped is the vendor to handle employee attrition? Do they have employees who are cross-trained? Do they have enough buffer capacity?
Vendor Transparency: How fair and transparent can the client expect the vendor to be? The invoicing has to be clearly segregated, especially when time and material are involved. This can be gauged only by references from previous clients or current clients who have worked with the vendor long in enough.
Compliance with Laws and Regulations: Make sure that the vendor complies with statutory laws and regulations. If this is not the case, it is very well likely that the client will be held responsible for the violations of the law. In the current scenario, the client company will be morally, if not legally, responsible for violations especially with regard to the environment and human resource factors. Good and legally safe working practices are essential for the vendor.
Culture: Last but not the least, it is important that the client and the vendor are culturally compatible. This is important for a common understanding of work ethics and smooth interaction. First impression is often the best impression here- analyze the vendor's initial communications and this will probably indicate how hassle free your future relationship is going to be.
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