Building An Outsourcing Strategy: 8 Steps For A Fail-Safe Plan

While outsourcing is a promising solution with numerous benefits, achieving the desired results depends on a well-thought-out outsourcing strategy. When working with an outsourcing firm, you need to understand the tasks that can be managed in-house and those best outsourced. This article lays out a fail-safe outsourcing strategy in simple steps to ensure success and raise your ROI graph.?

1. Get Your Ducks in A Row! Establish Clear Objectives.

A company that defines its outsourcing objectives earlier in the process gains a competitive edge. Here’s what you need to do:

Assess Internal Capabilities

Take a good look at your internal strengths:

• Which areas are you good at?
• Where do you need additional support?

Identifying these areas will help you choose the right task for outsourcing.

Evaluate Current Business Operations

The next step is to evaluate current business operations and obstacles.??

• What are the challenges in your business operations?
• Is there a specific process reducing efficiency?

Break these pain points into manageable tasks or processes. Consider which functions could be effectively managed by an external outsourcing partner. Identify areas requiring external support whether it's data entry, payroll, or IT support.?

Define Precise Objectives

Outsourcing for the sake of outsourcing will not provide optimal results. Define precise, measurable objectives. For instance, if you are outsourcing the recruitment process to a virtual sourcing partner your objectives might include:

• Reduce time-to-recruit by 50%
• Improve hiring managers' feedback by 100% increase in feedback score
• Achieve a client retention rate of at least 75%

Define the expected deliverables in terms of quality and quantity and set a realistic timeline. These clearly defined objectives add purpose and direction to your outsourcing strategy. Remember, successful business process outsourcing requires careful setup and implementation time.?

2. Allocate Budget For The Expected And Unexpected

When planning monthly, quarterly, and annual budgets, consider current staff augmentation needs and their benefits in reducing overall expenses. However, it's also important to budget for unexpected occurrences, such as employee turnover or new contracts requiring additional skilled labor beyond current staff capabilities.

Hidden costs are often cited by managers as a key reason why outsourcing initiatives may not meet initial expectations.

By carefully considering both current staff augmentation requirements and potential hidden costs, organizations can handle challenges with foresight and confidence.

3. Select the Right Outsourcing Model

When building an outsourcing strategy, focus on identifying specific areas where you need external support and why. Clearly outlined technical or creative abilities requiring support can help you pick the outsourcing method you need.?

Different outsourcing models are available, such as onshore, nearshore, and offshore options, each with advantages and risks. Selecting the appropriate outsourcing model in collaboration with your outsourcing provider can provide you with the additional support you need at a reduced cost.?

Also Read | Offshore vs Nearshore Outsourcing – Does Workforce Location Really Matter?

4. Choose The Right Outsourcing Partner

Selecting the right outsourcing partner is more than just checking boxes. It's about finding someone who complements your internal business processes, understands your company culture, and can help you optimize those processes.

Here’s a quick overview of the factors you need to consider when selecting the outsourcing provider:

Choosing the right outsourcing partner can offer various benefits and provide opportunities for business growth. Evaluate factors such as expertise, experience, service quality, communication, and financial stability for a well-matched partnership.?

?Also Read | Choosing the Right Outsourcing Partner - 8 Key Factors To Consider

5. Put Your Outsourcing Strategy into Action

This step is where your carefully planned strategy becomes a reality. Develop comprehensive training materials, workshops, or sessions to integrate the outsourcing company into your existing operations.

• Establish regular meetings to review progress, address challenges, and align on objectives.
• Utilize communication channels like email, messaging apps, or video conferencing platforms for continuous interaction.
• Clearly define roles and responsibilities to prevent misunderstandings.

Encourage your in-house and outsourced teams to understand the broader vision and recognize how their contributions drive the company's overall success.

6. Regularly Monitor Performance Metrics & KPIs

Establish performance metrics and key performance indicators (KPIs) to measure the success of your outsourcing strategy accurately. Outsourcing isn't a one-time setup—it requires ongoing monitoring and evaluation. Conduct regular reviews, whether weekly or monthly, depending on your outsourcing needs.?

Compare actual performance against established metrics and KPIs to identify trends, deviations, and progress towards goals. These evaluations also provide an opportunity for transparent communication with your outsourcing partner. Discuss progress, areas for improvement, and any changes in your business landscape that may impact the outsourcing arrangement.

7. Promptly Address Issues?

Even with a well-planned and executed outsourcing strategy, unforeseen challenges may occur. However, the important thing is to address these challenges promptly and directly. If you observe a decline in performance or a deviation from agreed-upon standards, don't postpone action in the hope that it will resolve itself.

Reach out to your outsourcing partner, express your concerns, and collaborate on finding solutions. The earlier you tackle these issues, the smoother your outsourcing journey will be.

8. Continuously Enhance Your Outsourcing Strategy

It’s important to understand that outsourcing is a dynamic process that should adapt based on your experiences and the evolving business demands. Analyze the data and insights you've gathered to pinpoint areas for improvement.

This might involve refining processes, revising KPIs, embracing new technologies, or reconsidering the scope of your outsourcing. The goal is to strive for excellence and remain receptive to innovation and change.

Conclusion

An effective outsourcing strategy offers a lifeline out of ineffective situations by reducing costs, enhancing efficiency, and tackling specialized tasks. However, certain steps must be taken beforehand. Assessing internal readiness helps you make the most of your outsourcing partnership.

At BPO Wizard, we recognize that outsourcing is more than just a buzzword; it's a strategic decision requiring thorough planning. We specialize in matching you with perfect virtual assistants who act as an extension of your team, propelling your business to new heights.

Book a free consultation to discover how our executive assistants can enhance your outsourcing strategy. Unlock new possibilities today!