In this series of blogs, Mark Danna, Owens Design’ VP for new business development, will highlight common mistakes that can cause an outsourced partnership to fail and detail a methodology for approaching an outsourcing agreement that can minimize the risk and costs involved and help ensure a successful partnership.
Not surprisingly, the process of making the final choice of outsource partner is very similar to that of hiring a new employee. Having determined the qualities you want in your outsource partner and picked what you believe is the best candidate, you must qualify that choice. Just as with a new hire, you need to check references to ensure that what you think you’re seeing is what you are really going to get.
This is perhaps the most important step in the outsource partner selection process, both for you, as the person responsible for making the selection, and for your company. This is not the time to go on gut instinct. Making a bad choice can seriously damage your company’s performance, in terms of lost customers, revenue, and market share, not to mention the money and time spent on the selection process — money that upper management may well view as being wasted with nothing to show for it. Needless to say, if you’re the one responsible for getting your company into a bad situation, it’s not good for your career. On the other hand, if you do a good job qualifying your final candidate, the results will be good for your company’s performance, profits, and market share.
Use a variety of methods to qualify your potential outsource partner: ask for references, rely on your personal professional network, and do some online research.
Ask the potential partner for references to client companies that brought it similar projects to your own. You can expect that they will only provide you with those of satisfied customers. It may, therefore, be worthwhile to check out their website looking for past partners not listed in their references and talk to those companies as well.
This is one of those occasions where investing a bit of extra time upfront can pay significant dividends in the long run. If it’s at all possible, try to meet face-to-face with the companies provided as references. Come prepared with a list of specific questions that cover those areas of greatest risk in your project, as well as the outsource company’s technical expertise, their record in meeting project deadlines, their success in bringing the project in at cost, and what the partnership experience was like.
This is also the time to tap into your professional network. Use industry contacts to uncover other companies who have worked with your potential partner. It’s likely that one or more people in your network knows someone who has actually been involved in a project with your potential partner. Talking to those people can provide you with valuable data on what it’s like to work with that particular outsourcing company.
Finally, go online. You can use online professional networks liked LinkedIn to find additional references. You can also check out the outsourcing provider’s financial statements and any recent news about them.
Having done due diligence, and having checked out your potential outsourced partner using their references, additional references you’ve uncovered, and any pertinent online information, now is the time to go with your (well-informed) gut instincts. Hopefully, you will have been able to spend some time with the team that will be assigned to your project. How do they feel to you? Do these feel like the kind of people you can trust?
Even when everything else checks out, it’s important to pay attention to your instincts. After all, you’re entering into a marriage of companies, and, just like a marriage between two people, if you’ve got doubts, you’re better off not going through with it, and taking a second look.
Catch up on this outsourcing blog series by reading the first step:
And step two:
Writing an outsourcing spec that delivers