Managing the Risks of Early-Stage Outsourcing

Outsourcing is an integral component of doing business these days. For many business owners, the prospect of outsourcing services carries a great many economic benefits, but it also presents unique risks and challenges. Complaints from customers, problems with third-party relationships and new regulatory issues and service integration problems present a wealth of issues to be addressed. Here are some thoughts about managing early-stage outsourcing risks.

Be Clear about Your Model

Have a very clear strategy and model of operation. Make sure that all of your objectives for outsourcing are properly prioritized. Define your clear roadmap for moving forward. This is how you develop strong models and strategies for your sales staff outsourcing model.

As you lay out your roadmap, identify the risks you face, evaluate your strategy and plan responses to potential problems. This will help you to mitigate risks moving forward for the outsourcing scenario you plan to use. It is far better to create risk strategies before implementation than to be reactive with responding to issues.

Create a Solution Set

Translate your goals for outsourcing to problem solutions. Know why you are outsourcing. What is the exact goal you have for the sourced services, and how will it solve problems you currently face? Simply moving towards outsourcing because it might save money is not enough. You need to understand why, from a business practice standpoint, outsourcing makes sense.

Choose Your Vendor

Next up: the process of shopping for an outsourced vendor. Talk with your stakeholders and evaluate proposals from various vendors. Compare what each company offers against your criteria and requirements. You may not find a single service that meets all of your needs, but you will be able to weigh capabilities against your biggest needs.

Create a Transition Plan

Outsourcing is rarely something that can simply be done. You likely already have policies, procedures and practices in place. These will need to be transitioned and modified to the new service, who may work a bit differently than you are used to. Creating a transition plan allows you to migrate to the new vendor in an orderly fashion.

This plan must be detailed and clear, outlining all handoffs, responsibilities, steps and accountabilities needed to move operations from in-house to the external service provider. The more detailed you can be regarding integration of your workflow and the vendor’s, the better off you will be.

Continue Oversight and Management

Never think that once your new vendor takes over, you can simply let them go. This is a recipe for disaster. Transition is the beginning of outsourcing, not the end. Maintain constant communication with the vendor. Continue to evaluate policies, procedures and workflow moving forward. Develop a relationship with the service provider and have a clear and structured flow of management, problem resolution and risk reporting. Remember that this process is an evolution and will grow and change as your company moves forward.

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