Five Steps to Outsourcing Success

Step number one. Go slow. Realize that outsourcing is a long term project. It needs very careful planning. Very often, because of financial pressures people are in a hurry to outsource their product or services. But the longer range programs, reduce the risk of failure. The more time spent planning and research, the higher the success rate. This can be applied in every area of outsourcing.

Step number two. Get professional help. I’m not necessarily talking about high-priced consultants from big name accounting firms, I’m talking about people who have had experience doing outsourcing projects. These can be middle managers in firms that outsourced their products and services. You can use them as freelance consultants.

Step number three. Do not look for the cheapest labor. The cheapest labor carries the very highest risk. There are some big countries with cheap labor but the highest risk countries to outsource to. Look for some middle ground. A country that has good English skills, whose interest is in America and American products.

Step number four.

Large projects. Break your project down into very small projects. The more small projects the better. And if you can fit the  small projects in your current system, that will help you to prioritize. But you may find that you can’t save the most money right away. You need to start small and build trust. This may mean starting with basic telephone answering. It might mean basic office duties. But you’re going to have to train the outsourcing provider to do things your way. You may find outsourcing providers who can do many of the things your way already. But you may have to train them on the details. Other providers, you may have to completely train. This is something businesses do not want to hear. They are looking for a turn key solution. These rarely exist. The vendors will try to persuade you that they exist, however the reality is – they do not.

However, it does not mean we get frustrated and give up. We need to understand this is a long-term process, that is necessary for every single firm to be competitive. It’s the reality we live in today. So your firm will have to find a way to outsource its products or services. Because your competitors are finding ways. But by breaking your systems down into smaller manageable pieces, you can outsource the pieces one at a time. Working with the vendor;  building trust and teaching them along the way.
It’s no different than opening a branch location, except it’s very long-distance. Often they will have to adapt their culture to fit your corporate culture. You will find outsource vendors are anxious to mold to your requirements. As long as they can make a profit along the way.

Small projects: You may find vendors who already provide specialty services, better than you have in house. Services like website design, SEO, writing, graphic design and other specialty skills.

Step number five. Look for a professional to oversee the outsourcing project. Ideally this is someone who has grown up in a first world country, who now lives in the target country where the outsourcing will take place. By having an American or European in the culture where the work will be done, you have a top quality consultant. They understand the needs and desires of the first world, and the problems and complexities of the Third World target country. Expatriates living in the Third World countries are excellent resources for consulting.

Just as every company needs to have a successful website, every first world company needs to have an outsourcing plan as part of their overall strategy. We can’t get around this. On the Internet, you will find all kinds of people who will talk about the problems, and the horror stories of outsourcing. You will find all kinds of negative publicity, prejudices, Luddites and people who try to discourage outsourcing.
But the fact of the matter is, many companies are successful at outsourcing. Most of them are not talking about it. They don’t want their competition to know, they don’t want their customers to know how well their outsourcing is working. It’s a very secretive area.

One of the countries that is doing very well in the outsourcing business is Philippines. It’s a major success story in Asia. They have strong English-language skills, they understand American culture, and they have a desire to please their clients. They’re very aware of the latest business practices, and they’re highly teachable.

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