The Four Stages of Outsourcing: Part II

Having an outsourcing solutions provider as a partner for your business may prove great benefits to both your company’s budget and operations. However, if your company will rush into an outsourcing partnership without going through the general process, your decision may hinder your business from being successful and from maximizing the partnership.

(This is the second of two parts discussing the four stages of outsourcing.)

As our previously published article, The Four Stages of Outsourcing: Part I, suggests, the general outsourcing cycle is comprised of four phases, namely:

1. Strategic thinking
2. Evaluation and selection
3. Contact development
4. Outsourcing management or governance.

In most cases, companies who went through the said phases are those who were able to enjoy their partnership with a solutions provider.

With the first two stages of the outsourcing cycle discussed in the first part of the article, your idea of outsourcing should now be tied to the fact that outsourcing plans should be carefully planned and evaluated, from the activities to be delegated to an outsourcing partner to the location where the outsourcing partner is based.

The third stage in the outsourcing process is Contact Development.

What is Contact Development?

The third stage comes in once you have already chosen the outsourcing partner for your business. Before proceeding to Contact Development, it is highly suggested to ask for a trial period for you to be able to gauge the capability of the outsourcing solutions provider.

It is after the outsourcing company was able to show that they are competent to provide the services necessary for your company’s business processes that you move on to the third stage. The Contact Development phase is where the agreements and legal documents are to be exchanged between parties. When it comes to outsourcing, the pricing is usually the main concern for companies because work quality can still be maintained with an in-house team, but at a more expensive cost.

It is in this stage where agreements with pricing are discussed; but even if this particular concern may already be brought up during the first two stages, it is during this stage where the negotiation and agreements take place. Among the important components of an outsourcing partnership are service level agreements (SLAs), non-disclosure agreements and pricing terms.

Once the legal documents and agreements are in place, your outsourcing venture is now ready to be commenced. It is in the fourth phase, the Outsourcing Management, where the relationship between the outsourcing solutions provider and the client is built. A healthy outsourcing venture between provider and client must be only not limited to just exchanging demands and outputs, but it must grow into a working relationship. An outsourcing partner that is trusted and preferred by many is able to work a relationship out of a business venture that can eventually lead to the client being comfortable with them. An outsourcing partner should be able to make suggestions on how to further make your business processes efficient instead of just agreeing on every demand made upon them.

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