The success of an outsourcing arrangement depends entirely on how the entire process is managed. It requires thorough planning right from the beginning, but this is an area that has not been given due importance yet.
Whether you are a big corporation or an entrepreneur, you need a systematic framework to manage the outsourcing process. Outsourcing mangement may be broken into several components. These are areas that need constant attention from both the client and the service provider. Let us examine these areas.
Cost benefit is the single most important reason to outsource. It does not make sense to either the service provider or the client if they are going to spend more than what they earn. Therefore both parties need to analyze the scope and the pricing before they start on a contract.Communication Management
Regular communication is vital for the smooth running of an outsourcing deal, right from the negotiations stage. Good communications systems, regular contact, clarity in instructions and feedback, a system for clarifying doubts- these are all important.Performance
Both quality and adherence to the timeframe matter. The client and the service provider should have systems in place to review performance at regular intervals. The parameters have to be established early on. The progress of the project has to be constantly monitored to avoid drastic situations.Crisis and Risk Management
Having a back up plan is the ideal way to prepare for risk. This should be ready before the contract is signed. Similarly, both the parties need to be financially and professionally equipped for contingencies.Knowledge Transfer and Transparency
Both the partners of an outsourcing deal need to have complete information of the project. It also needs regular, close monitoring. This is integral to productivity.Managing Relationships
Good relations between the partners make it a lot easier to run a project. It starts with developing good mutual understanding. Transparency from both partners, regular communications and some amount of flexibility in the contract- these are all part of a successful outsourcing relationship. Both partners need to be open to reviewing the scope and the pricing of the contract if necessary.In-house Management
So far we examined only the external aspects of the outsourcing contract. However getting your own house in order is also important. Both client and vendor companies need to evaluate their own capabilities and determine the workload distribution. Having a project manager responsible for each of the contracts helps. Another crucial aspect is training the employees to manage the outsourcing arrangement.
Ultimately, a successful outsourcing arrangment has to be one that benefits both client and vendor. The system you choose has to suit the business situation.
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