Tips for Evaluating an Offshore Outsourcing Vendors
by Carrie Hinkel on December 5th, 2007
Whether you’re outsourcing a call center, IT professionals, an accounting staff or web designers, you want to make sure that the vendor you choose is the best fit for your company. Otherwise, once you sign a contract and begin work it will be costly and difficult to switch to a different outsourcing company.
Be forewarned, the evaluation process should be lengthy and detailed. Not only should the outsourcer interview each of the outsourcing candidates according to the requirements of your company, a thorough research online should be done as well. That’s important, as you should not assume the word of the outsourcing company to be 100% accurate until you have talked to past or present clients, read reviews, etc.
Since every company’s needs are different, there isn’t a single evaluation formula that works for everyone. However, going through this list should help most businesses simplify the process and minimize the risks of hiring an outsourcing company.
Decide exactly what you need
It sounds crazy, but most companies start looking for an outsourcing company with only a vague idea of what they want, for example ” a call center”. That leaves the outsourcing company in charge of filling in the blanks for you. And, if there’s something they don’t offer (24 hours-a-day live operators) then you don’t need it. It’s important for the outsourcer to put down on paper the exact requirements they are looking for. For example, “24 hours-a-day live operator call center with 100-200 employees, excellent English speakers and familiarity with the IT sector”.
Looking at the outsourcing company’s size
In the case of your outsourcing company, size does matter. If you start out with a company that is too small, then it may be hard to expand your project later. Also, what if the vendor loses a client or two – will they go under? Then again, if a vendor is too large then you might get lost in a sea of other clients, you might not get the best workers on your team, or you might not be able to talk to the right people right away when a problem arises. A rough guideline to use is that a company’s outsourcing vendor should be between five and ten times that of your project. For example, if you outsource a project that is worth $1 million a year, then the vendor’s annual billing should be between $5 and $10 million.
Industry expertise
Does the vendor you hire need to have experience and or expertise in your particular industry? Will they need to know certain technical lingo to be able to effectively communicate with your customers or your employees? For some companies that will be a necessity, for others it won’t matter. Take an in-depth look at the outsourcing project and decide if this will be a requirement and exactly what the requirements will be, as far as experience, expertise, knowledge about specific programs, etc.
While these aren’t all the evaluation techniques, it’s enough to get you going in the right direction. As mentioned earlier, once you have narrowed your list down to just a few companies, do some online research to find unsolicited reviews from past or present clients. Look in discussion forums, do a Google search, etc. Do as much research as you can and talk to as many clients as you can. Then, once you have chosen your vendor, do a small test project so you can see how the outsourcing company does in action. If they meet your expectations, then it’s time to sign the contract and begin your long-term project.