When outsourcing:

  • remember that although the supplier takes responsibility for the process, you still need to actively manage the relationship
  • take your time making decisions and make sure you are clear about the terms on which you and the supplier are working together
  • make the effort to establish a good relationship – this calls for constant communication and flexibility
  • nominate a member of staff to take responsibility for liaison

It’s equally important to establish effective and regular communication within your business. Staff may have particular concerns about their own jobs, so keep them informed.

If staff are being transferred to the outsourcing provider under the arrangement, as sometimes happens, you will need to consider the relevant employment legislation.

You are likely to get the best results if you can stay with your supplier for several years. Switching suppliers can be disruptive, so it pays to commit to building a long-term relationship from the outset.

You may need to renegotiate the contract before the end of the term. A flexible contract benefits both parties, allowing the supplier to innovate and you to react to changing circumstances.

Measure success

There should be financial benefits, but other reasons for outsourcing are harder to quantify. These could include improving customer service, reducing errors or increasing speed to market. Include these factors in your assessment and consider how you’ll measure them.

Plan a clear exit strategy

The relationship might end prematurely or may simply have run its course.

Either way, make sure that your service level agreement contains a clear exit strategy. It should:

  • detail how the outsourced functions should be brought back in-house
  • clarify who owns what assets
  • specify when compensation is due, and how much

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