Key Criteria for Choosing the Right Outsourcing Agency Partner
Outsourcing to an offshore location can help a company cut its operating expenses significantly. Emapta, an outsourcing solutions provider with multiple offshore locations, estimates a developer’s annual salary in North America to be around $108,000. In contrast, the yearly salary of a developer in the Philippines is $25,188.
That’s 76% savings on salaries, not counting the savings stemming from the lower cost of infrastructure, real estate, and administrative support in the offshore location. There’s no doubt about it – outsourcing makes economic sense.
However, outsourcing is not without its difficulties. Communicating in real time with a team in a different time zone may be challenging. Language and cultural differences can also lead to further communication challenges. Outsourced staff, especially in customer service, will deal with frontline work and impact the brand. Mistakes by untrained staff and non-compliant operations can lead to costly losses and penalties. High attrition and low retention rates can lead to lower productivity and additional recruitment, onboarding, and training costs.
These issues do not make outsourcing nonviable; think of the more than 70% cost savings. They simply highlight the fact that the choice of an outsourcing partner is crucial to outsourcing outcomes.
Read on to learn the essential criteria for choosing an outsourcing provider.
Expertise and Experience
If you are building a house, will you entrust the construction to a contractor without structural know-how and residential construction experience? Earnestness and passion are well and good, but you need someone with expertise and experience if you want your outsourcing venture to succeed.
Ask prospective outsourcing agency partners for case studies and other proof of their competence, proficiency, and experience. Look through their information and check if the outsourcing services provider:
- Has experience in your domain: If you’re an eSIM cloud provider serving network operators, has the outsourcing agency worked with (or is it working with) organizations in the telecommunications industry or cloud-based systems providers?
- Has experience fulfilling similar requirements: If you need technical support, does the outsourcing partner have tech support teams that provide outsourced technical support to other companies?
- Has a track record of providing outsourcing services: How long has it been in the business, and how long have existing clients been working with the outsourcing agency?
You should also look at a prospect’s outsourcing-industry proficiency. Does it have certifications, qualifications, and industry recognition to show that it has a thorough understanding and knowledge of the outsourcing industry?
You should also evaluate the caliber of the company’s leadership and employees. In the latter case, you should be particularly interested in the employees occupying roles similar to your requirements and the teams serving clients in your industry. That will tell you about the outsourcing agency’s standards and the level of talent the outsourcing agency looks for when hiring outsourced staff for its clients.
Reputation and References
Take the time to ask around to learn about the reputation of your prospective outsourcing provider. Request a list of past and existing clients you can interview. The referrals should belong to your industry or have outsourced roles or jobs similar to what you plan to outsource.
Ask these clients about their experience working with the outsourcing solutions provider. Specifically, ask them:
- Why they chose to work with the outsourcing agency
- Why they are still working with the agency, or why they decided to end their collaboration
- What is/was the level of talent the company provides/provided
- Are/were they satisfied and happy with the company?
- What they liked about the company
- What they disliked about the company
- If the company kept its workflows and processes confidential
- If the company secured and safeguarded their client data
- If they accomplished their goals working with the company
Communication and Collaboration
It can be tough communicating with a company located halfway around the world, especially one that will handle and process your data and represent you to your customers. It is crucial to ensure that your outsourcing agency is cooperative and communicative.
From the beginning of your communication with your prospective outsourcing agency partner, you should assess its responsiveness. How promptly does it respond to your inquiries and concerns, and how often does it give you updates? Check if it has time and is on time for meetings.
Evaluate its communication channels. The best companies have efficient processes, including those that make communicating with clients easy and painless.
You should also talk to prospective providers about your business goals and workflows, then interview them to evaluate whether they understand your goals and processes. Ask them how they plan to integrate your operations and workflows into the teams they will build for you to ensure seamless integration with your teams at home.
Finally, you should talk about language, culture, and time synchronicity.
You can mitigate the first two issues if you choose an outsourcing destination with a talent pool that is proficient in your language and whose culture is compatible with yours. With the right agency partner, these should be fine. An experienced outsourcing agency will promptly and effectively address any challenges arising from language and cultural differences with training.
How about the time zone difference? If a U.S. company working in Central Standard Time (CST) outsources customer support to an outsourcing agency operating in Philippine Standard Time (PHT), there will obviously be a time zone disparity; PHT is 14 hours ahead of CST. When it’s 1 p.m. on May 3 in CST, it’s 3 a.m. on May 4 in PHT.
This time zone difference can lead to problems with the wrong partner. What if you’re flooded with tech support calls and require additional tech support seats to deal with the temporary surge?
Therefore, make sure you work only with a provider that will work and provide you with outsourced staff in your preferred time zone. This will ensure seamless and prompt communication, unaffected by time zone differences.
Your outsourcing partner must also be conscientious about training outsourced personnel regarding time zone differences and have systems in place to enforce accurate timekeeping. For instance, notes created by outsourced employees must automatically be time-stamped in the client’s time zone to ensure there will be no issues with keeping accurate records.
Cost and Returns
Outsourcing can help you save on operating costs, so cost must be one of your top considerations when choosing an outsourcing solutions provider.
You should look at your prospects’ pricing structure. Things you should look at include:
- Are you paying an all-in fee or paying for services piecemeal?
- Will the outsourcing agency provide a price breakdown (salaries, benefits, infrastructure, service fees), or is everything lumped into a non-itemized sum?
- What other charges will you incur (e.g., taxes, expediting fees, legal compliance, etc.) when you work with a particular provider?
Next, compare your costs with other potential partners and industry benchmarks. Consider non-obvious charges, such as how much it will cost to integrate your offshore operations into your current setup and the expenses associated with traveling to and from the offshore location for monitoring visits.
Finally, consider the cost in the context of returns. A more expensive outsourcing agency that can provide better returns may be the better option.
Carefully Evaluate Prospective Outsourcing Providers
Your outsourcing agency partner determines whether or not outsourcing will help you achieve your business goals. Therefore, carefully evaluate prospective outsourcing agencies on factors like experience and expertise, reputation and references, communication and collaboration, and cost and returns.
Suman(Kul Prasad) Pandit is an accomplished business professional and entrepreneur with a proven track record in corporate and start-up sectors in the UK and USA. With a focus on sustainable business practices and business education, Suman is highly regarded for his innovative problem-solving and commitment to excellence. His expertise and dedication make him a valuable asset for businesses seeking growth and success.