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Find Your Perfect Outsourcing Mate

In today's business climate, you need to be exceptional at your core competency or value proposition to your client and you need to outsource the rest. Finding the right partner, though, is critical to success.

Choosing the right partner goes beyond capabilities. You have to consider the corporate culture as well. In addition to being able to do the work, the ideal partner should be able do it seamlessly by fitting with your team and with your client's needs. As in any dating game, the big questions are: How do I find the right partner? What do I need to consider?

When evaluating a new outsourcing partner, it is important to look at their mission or value statements. How do these hold up to your own company's mission and value statements? Are they well aligned? If they are, move on and explore the company further. If not, walk away. Mission and value statements speak to the core culture of the company, so if you can't find common ground here, it is unlikely you will be able to build a positive working relationship.

What standards of quality and delivery does the potential partner employ? Here it is important to look at their metrics and processes. How do these compare with the ones within your company? If they are similar, it is not only likely your systems will be able to work well together, but also likely that the two companies have a similar approach to standards of quality and delivery.

Next, take a look at where the potential partner has made investments. Has the company spent in similar areas to your company? Similar investments show business culture or strategy alignment. If the investments are different, find out why.

What will your relationship be? That is, will you be a small fish in a big pond or a big fish in a small pond? When times are good this doesn't matter, but when there is a customer satisfaction issue, it can mean the difference between client retention or client attrition. It is essential to know where you stand inside your partner's organizational priorities. If you are comfortable with where you will stand, that's great. If not, find another partner.

It is also important to look at the long-term strategy of your company and your potential partner's company. Does the service they will be providing on your behalf align with their continuing plans? And with your ongoing plans? Continuity and service development is important to your company and to your customers. The potential partner needs to be able to provide the specified service for the foreseeable future and also needs to be able to grow with your company's strategic needs.

Finally, look to social media. What are others saying about your potential partner in an unfiltered environment? Are people pleased with the service the company provides? Are there any red flags with respect to the company or the service they provide? Social media can help call attention to potential issues.

By following this guide, you'll be able to better evaluate potential partners and identify partners that are a good fit from both a business and cultural perspective.

17 comments on “Find Your Perfect Outsourcing Mate

  1. Ashu001
    July 5, 2013

    Frank,

    Whether we do Outsourcing or not today is not just about Cutting costs(as you have nicely illustrated in your Post).

    Rather it is about whether the Provider delivers the best Value proposition (compared to doing it In-house).

    Look at what P&G and GM are doing today[Bringing a large part of their Outsourced operations back in house) simply so that they can deliver products faster and ensure the entire Team sits together(&collaborates).

    Outsourcing need'nt always be the Panacea it is often made out to be.

    Regards

    Ashish.

  2. Frank Cavallaro
    July 5, 2013

    Ashish Thanks for your comment and I couldn't agree with you more. As mentioned in my blog, it's all about core competency and delivering value to customers through execution of that competency. “Delivery the best and outsource the rest” is fast becoming the successful business battle cry.

  3. elctrnx_lyf
    July 5, 2013

    This is definitely true if you are planning to choose a partner for the long term. But i would think it may not be easy to align the mission and vision of the partner with ours. But hte next step of assessing process and quality syatems is much more important.

  4. _hm
    July 6, 2013

    @Ashish: I concur with you. Outsourcing is not panacea and if you add all hidden and long term cost, they are very expensive too. Outsourcing also involves substantial risk of losing customers or market.

    But you need to have outsourcing if you can not achieve that technology. One option is to look for acquistion. Many of this small organization with unique abilites are made of technology mavericks and it is difficult to tame them with bigger culture of corporate world. One need to make compromise in this case.

     

     

  5. SP
    July 6, 2013

    Basically a company outsources work when they dont have expertise within or hiring an expert and giving him/her continuous salary will be expensive than just getting it outsourced. You can terminate the relation if the clauses are drafted well. Sometimes its good to get the work outsourced but you need the right project managers to oversee the deliverables.

  6. SP
    July 6, 2013

    Many companies in US outsource their documentation and maintenance jobs to low wage countries. The risk is low in terms of project deliveries and the outsourcing company can concentrate on more critical and design oriented jobs. When you make a outsource partner its always good to see that both companies must compliment each other. If both companies have the similar business interest it most likely one will get acquired by other or it becomes a merger.

  7. Hailey Lynne McKeefry
    July 9, 2013

    @Frank, thanks for this reminder… We talk about partners all the time, but we say it without thinking of the broader ramifications. Compatibility is a critical part of any relationship–and there's something to be said for remembering the “Marry in haste and repent in leisure” reminder. It's true in outsourcing relationships. Rushing into a partnership can lead to all sorts of issues long term.

  8. Hailey Lynne McKeefry
    July 9, 2013

    @SP, you make an excellent point here. I'd like to hear from others… What do you outsource and what do you keep in house? How do you make the decision?

  9. Daniel
    July 9, 2013

    “In today's business climate, you need to be exceptional at your core competency or value proposition to your client and you need to outsource the rest. Finding the right partner, though, is critical to success.”

    Frank, am not sure how much its true. What I understood from the market is most of the clients are looking for a package solutions from a single vendor. Ok, it can be through a third party outsourced provider too.  But they need all supply of services/support/components etc from a single source.

  10. Frank Cavallaro
    July 10, 2013

    You make a valuable point in that a single point soluiton is important to your client in terms of total value. That said, most organizations do a few core things very well and others to a lesser degree. By delivering the core value yourself and outsourcing the non-critical items– while still controlling the entire process—is the key to providing your client an end to end vlaubale offering.

  11. FLYINGSCOT
    July 11, 2013

    It is also good to partner with someone who can bring new technology to your way of thinking.  We often try to find partners who can help us develop new ideas and products to stay competitive.

  12. t.alex
    July 14, 2013

    Frank, i totally agree with you on this. I would rather partner with companies that really focus on their core strength and we can strategically move forward. There are companies who try to do everything with any key competency and it is very hard to work with them.

  13. Daniel
    July 15, 2013

    “That said, most organizations do a few core things very well and others to a lesser degree. By delivering the core value yourself and outsourcing the non-critical items– while still controlling the entire process—is the key to providing your client an end to end vlaubale offering.”

    Frank, internally we can outsourced the non-critical items to third party vendors, but it has to appear to the customers as service from a single point.

  14. Daniel
    July 15, 2013

    “i totally agree with you on this. I would rather partner with companies that really focus on their core strength and we can strategically move forward. There are companies who try to do everything with any key competency and it is very hard to work with them.”

    Alex, competition is there in all sectors. When customers prefer to get all the solutions from a single point, vendors try themselves to groom for fitting to the slot. Some may perform well and others may get collapsed. It's all depends up on how they are able to manage it

  15. t.alex
    July 15, 2013

    Jacob, 

    Yes it is competitive. I just mention those companies that just simply say 'yes' to each and every request and to each and every kind of customer, and they end up not able to come back with the deliverables as promised. These companies are disasters.

  16. Daniel
    July 16, 2013

    ” I just mention those companies that just simply say 'yes' to each and every request and to each and every kind of customer, and they end up not able to come back with the deliverables as promised. These companies are disasters.”

    Alex, if they are not able to deliver the committed services, then no point in doing any business with them. Credibility is an important factor in any business.

  17. SunitaT
    July 31, 2013

    Make sure that your outsource partner is economically secure, as this is a critical factor in outsourcing. You could also discover out more about the outsourcing service provider's directors and managers, their experience and their qualification. Geared with such detailed info, you will be able to analyze if a specific outsourcing service provider can match up to your prospects.

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