Outsourcing can indeed save any company huge amounts of money and resources, including personnel or human resource. But if poorly managed, it can bring about unnecessary expenses, costly mistakes, and tremendous headache. There are just so many things that could go wrong!
For example, in an IT setting, it’s necessary to ensure: that the source code will be owned by the client and not the service provider; that the contract is adaptable to and cope with any business changes; that a system to gauge the projects’ triumphs or milestones; and, that the liaison can speak with and relate to the project workers and the entire workforce in general.
The manager would be totally wrong to assume that he can hand a project to a service provider and be done with it. It’s never going to work on autopilot while the manager goes out and does something else. For one, he can’t just go to the office across the hall to talk to the department head responsible for a team that made a mistake. These providers are usually miles away, sometimes literally on the other side of the world; not to mention differences in culture and values.
Managing outsourced projects and tasks requires time, energy and mastery, however confusing or complicated it may seem. All around the world, companies turn to outsourcing to reduce or help stabilize expenses, tap advanced technology, make up for lack of experts or skilled laborers, improve efficiency and maintain a competitive edge in the global market. Better administration of these assignments requires constant communication between vendor and customer, plus a great deal of flexibility.
This starts in the selection process. It is almost always best not to choose a provider based on price only, because you usually get what you pay for. Responsiveness of customer service is one factor that is highly important. Commitment to deadlines and guarantees in service-level agreements, industry expertise or extensive portfolio, flexibility and adaptive capability, competent use of technology to move business forward , and comfortable level of professional relationship are just some of the factors to consider when choosing an outsource partner.
Managers should also be careful about divided loyalties. Some vendors may be concerned only with benefiting their own businesses. This, among other risks, can be avoided with the proper drafting of the contract, called statement of work. Stipulate deadlines or regular milestone checks. Identify who owns the finished product. Ensure that the vendor would provide at least the basic level of support.
In the entire process, from vendor solution to project completion, the manager should consistently keep an eye on the operations and outcome.
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