Outsourcing Management Tips and Tools

Outsourcing is a popular strategy for cutting costs and improving efficiency, used by the majority of successful companies for functions such as IT, legal support, real estate and facilities management, and tax preparation. Using outsourcing partners can be a great way to improve internal productivity and trim your payroll budget.

But outsourcing can also have its share of problems. Outsourcing the wrong functions, choosing the wrong partner, getting locked into a poorly designed contract, budgeting miscalculations, and poor communication are some factors that can cause your outsourcing strategy to run aground. Here’s a breakdown of some common outsourcing management problems to avoid, some best practices to help you get the most out of your outsourcing partnerships, and some tips on what software you need to outsource successfully.

Potential Problems with Outsourcing

The majority of successful businesses use outsourcing as part of their business management strategy. For example, a Deloitte survey of multi-billion-dollar companies found that over half use outsourcing for functions such as IT, legal services, real estate management, and tax preparation, and over four in ten outsource human resources, finance, and procurement. These companies say they find outsourcing useful for purposes such as cutting costs, reducing workloads to focus on core tasks, and improving service quality.

But outsourcing requires working with partners outside your company, introducing new variables to your workflow which can create some potential problems. A TPI study of outsourcing implementation found that a number of issues commonly plague outsourced relationships, including:

  • Failure to understand new processes and decision-making flow: After a company makes the transition to outsourcing, both the company and its outsourcing partner may be unclear on how they’re supposed to work together. For instance, it may not be clear who is responsible for initiating a task, what processes are supposed to be followed, or what software is to be used.
  • Lack of support from client leadership: In some cases, an outsourcing relationship may be initiated by someone in a company without enthusiastic support from company leadership. This can result in lack of cooperation or even resistance.
  • Poor understanding of contract terms: Some team members may have been out of the loop when the outsourcing contract was negotiated, resulting in misunderstandings when implementation begins.
  • In-house partners lack sufficient manpower or skills to work with outsourcing partners: While outsourcing shifts some responsibility to the outsourcing partner, in-house team members still need to do their share to benefit from the relationship. When in-house staff is too small or lacks the necessary skill set, the outsourcing relationship may be inefficient.

Addressing these and other potential problems requires a sound outsourcing management strategy on the part of the company employing outsourced services.

Outsourcing Management Best Practices

You can minimize these types of issues by following some outsourcing management best practices:

  • Do due diligence when selecting an outsourcing partner: An experienced outsourcing provider will be familiar with common snags in the process and can help you avoid them. Consider multiple providers before settling on one, comparing their services, pricing, and benefits. Look for partners who have solid testimonials from clients, and ask for referrals from potential partners. Interview prospective partners in detail before signing a contract.
  • Develop a clear contract and procedures: Clarifying your outsourcing contract, policies, and procedures in writing can help you avoid many unnecessary issues. Review your contract with your provider carefully to make sure all bases are covered, including your exit strategy in case the relationship doesn’t work out. Establish a clear policy and standard operating procedures so your workflow and chain of command are documented and transparent.
  • Budget proactively: Your outsourcing costs may go over budget due to factors such as need for unforeseen additional training or services. Communicating your budget limits to your partner and working with them to establish realistic cost projections can help avoid potential issues.
  • Set up clear communications procedures: Most outsourcing issues involve a failure to communicate. Documenting and following standard communications procedures can help you avoid many common problems. Designate which personnel should serve as the primary contact points for your organization and your outsourcing partner, as well as which communication channels and procedures should be used when conversing.

Following these best practices can spare you many potential hassles and ensure that your outsourcing relationship is efficient and productive.

Software Requirements for Successful Outsourcing

A productive outsourcing relationship also depends on a software infrastructure suitable for supporting your communication and collaboration with your provider. Some of the most essential software requirements for effective outsourcing can include:

  • A unified communications as a service (UCaaS) platform that provides a single interface you can use to communicate with your outsourcing partner over any channel, including VoIP phone lines, visual voicemail, mobile apps, and video conferencing, without the need to juggle multiple apps
  • Web conferencing with screen sharing built into your UCaaS solution so that you and your partner can easily share visual aids for smoother collaboration
  • project management interface that makes it easy to assign and schedule tasks and track progress on collaboration
  • A contact center as a service (CCaaS) platform, if you intend to outsource your customer support functions, so that remote representatives can access your contact center through the cloud
  • Integration of essential software tools such as CRM with your UCaaS and CCaaS services, so that you and your outsourcing partner have access to critical apps and data needed for productive collaboration

Having this software framework in place will make it easier for you to implement outsourcing management best practices and optimize your collaboration with your provider.

Conclusion

Smart partner selection, a well-designed contract, good budgeting, and good communication are keys to outsourcing successfully. Following these best practices and using the right software to implement them will help you enjoy the increased efficiency that outsourcing offers. Your business has enough on its plate. Outsource what makes sense for your business, choose a world-class SaaS technology solution and focus on what's important: your clients. Call 1-866-879-8647 or fill out an online form to request a no-obligation quote from an 8x8 product specialist.

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