5 Tips For Offshore Outsourcing

Offshore outsourcing provides invaluable business value to corporate. It acts as an effective business strategy to cut costs and enhance quality and thus maximize the profit margin. However, like everything else the success of an offshore outsourcing deal depends solely on how to carry it out.

Here we provide you some tips on how to actually go about executing your offshore outsourcing initiative so as to make it a success.

1. First things first, have a detailed study conducted on all your requirements. Prepare a list of documents that have detailed the business logic and all other information the vendor will need. Define your service level requirements (SLR) in unambiguous terms.

2. Ensure adequate flow of information between you and your provider. Develop a communications plan for primary external and internal stakeholders, providing mechanisms for feedback, two-way communication and especially for active follow-up with the offshore outsourcing manager(s) and project team members.

3. Determine how stable a supplier's workforce is and find out how it measures its attrition rate. Outsourcing is all about people. So give this the same amount of attention as you would do if you employed these people yourself in your own office. Ask the provider to provide you a named list of people that will work for you and insist on keeping the team composition unchanged.

4. Insist on the provider coming up with measurable metrics about the work - both in terms of quality achieved and quantity served. Check if the metrics are such that you could double-check these on your own easily. Insist on a regular MIS reporting by the provider. The frequency of the reports will depend on various factors, but, should never be less frequent than once a month.

5. Insist on reward and penalty clauses within the service level agreement (SLA), based on these metrics. However, be flexible in reviewing these clauses from time to time. Remember, just as you are taking a risk outsourcing the work, the provider also is taking risks. It doesn't necessarily make you a winner if the provider's costs increase unduly while acceding to your demands.

These 5 tips are not enough for a successful offshore outsourcing management. I welcome your comment here or contact me directly.

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