Get it Right First Time: Your Offshoring/Outsourcing Checklist

For businesses who have never outsourced or offshored any elements of their organisation before, the decision can be a daunting one. How can your new provider guarantee quality? What do you do if things don’t proceed in a manner that you’re satisfied with? And how do you know these people are the right ones for you? These questions, though complicated, can be answered with a simple, methodical approach when searching for a provider. To ensure you only get the best people on board, print out this checklist and take it with you to any meeting. If you follow it point by point, you’ll quickly get an idea of what you’re getting yourself into—and whether you want to work with this company moving forward.

The Offshoring Checklist

Make sure the provider is credible

The first thing you should do before you embark on any contractual negotiations is to establish whether the company is credible in the first place. If they seem a little dicey, turn around and leave. There’s absolutely no need to continue. Follow the below steps to ensure you’re not wasting your time.

  • Establish how long the company has been operating as a provider of offshore/outsourcing solutions
  • Get an overview of the business model. How large is the provider?
  • Without giving away too much of your business model, enquire as to what their areas of expertise are
  • Ask: Why should we choose you?

Establish provider’s level of experience

If a provider has no experience, you cannot confirm whether they can do what they say they can. And while it’s unfair to assume that they won’t be able to deliver just because they’ve never delivered on a project of this nature before, you need confirmation that you’re going to get what you’re paying for. So, this section is all about proving their reputation—and asking for the evidence.

  • Ask provider to give a detailed breakdown of their last three outsourcing contracts
  • Request contact information for these organisations
    • Contact organisations for a reference
  • If confidential, ask to see case studies
    • Read case studies

If the provider cannot provide references or case studies, it’s advisable to find a provider who can.

Get to know the management teams

The management team is a collection of people who you will have the most contact with. Not only will you have to deal with them, but your offshored/outsourced team members will have to listen to them. And to power your onshore growth, you need experts in every field; you need qualified, experienced people making the decisions you’re not geographically able to make—so make sure they’re the right people for the job.

  • Establish the profiles of the people who comprise the management team
    • Define who is responsible for each area. Who takes care of what?
    • Establish how much experience each individual has in that particular area
  • Find out who will be responsible for your project’s implementation
    • Define who is responsible for each area. Who takes care of what?
    • Establish how much experience each individual has in that particular area
  • Confirm escalation procedures when things don’t go to plan. How long will it take until you find out about mistakes/problems?

Define a profile of your offshore/outsourced employees

Aside from the management team, you also need to ensure that employees across the hierarchy are the right ones for you. As you don’t want to find out that they’re not at a later date, now is the time to establish the fit. Therefore, follow these steps:

  • Confirm the minimum level of education employees possess
  • Enquire as to the nature of the training programs on offer. Are there any? If so, what do they learn?
  • How does the provider ensure that all employees are aware of industry trends, latest knowledge and the most up-to-date standards?
  • Establish provider’s hiring policy
    • What is their labour turnover?
    • How much do they pay their teams?
    • What other incentives are in place?
  • Discuss availability of scaling in the case it eventually becomes a necessity
  • Establish provider’s relationship with external collaborators
    • Do they ever outsource/offshore?
    • If so, how do they ensure the quality of the work being contracted?

Establish working processes

After you have a solid overview of the type of people you’ll have working for you—and the nature of their relationship to you—it’s time to discuss processes. Here, it’s important to define the operational makeup of your relationship and to discuss how to keep productivity high. Therefore, it’s important to confirm the working procedures your provider is already accustomed to working with and to refine which processes would work best in your individual circumstances.

  • Establish the level of certification the provider possesses in relevant areas
  • Discuss provider’s usual project management methodology
    • Does this suit your organisation?
  • Confirm what the reporting guidelines will be for deliverables and performance
  • Define the exact number of years of experience the provider has in your specific industry
  • Establish communication processes between your organisation and the provider
    • Ensure they are fast and effective
    • Ensure that this won’t take up too much of your time
      • Define degree of autonomy expected

Make sure appropriate security measures are in place

Security is often something many organisations overlook—until it goes wrong. The ability for your provider to guarantee a secure transfer, storing and use of your company’s sensitive data should be a make-or-break style discussion. If they can’t guarantee latest security processes, you should consider moving on with your search. Therefore, take your time in this section and discuss the following:

  • Establish provider’s current security model
    • How do they protect the data of their other clients?
    • Define whether provider has ever had to deal with security breaches
    • Confirm where these processes are managed—are they taken care of in-house or outsourced to a provider of security solutions?
  • Enquire as to how often provider updates security software/procedures

Discuss intellectual property ownership

Another oft-overlooked element of the outsourcing/offshored business process is intellectual property ownership. Who owns the licenses once the work has been completed? This is an important part of the conversation and you need to ensure that despite the provider producing your product, legal processes are in place to ensure it remains yours.

  • Discuss provider’s readiness to contractually agree to ownership of code, processes, hardware and licenses
    • Determine intellectual property rights

Establish the price of all services

One clearly important aspect of your on going relationship is how much you’re going to be paying for their services. If the price is too high, it might not prove worthwhile in the long-term. If the price is too low, it might raise questions as to the level of service the provider will be able to guarantee. Therefore, follow these points to ensure expectations are understood—and eventually met.

  • Determine the pricing model applied to your particular project
    • Establish scalability
  • Discuss the hard costs of the arrangement
  • Enquire into hidden costs
    • Is there anything that you should expect?
  • Confirm the payment schedule
  • Discuss taxes

Confirm the details of the contract

After an initial agreement has been met, the provider will typically send you a draft of the contract. This contract will be legally binding moving forward, so ask to see a dummy version before hand. If one is not available, it’s always a good idea to inform yourself in advance by discussing the major points of the contract and to get a solid overview of the legal points and terms.

  • Discuss the most important elements of the contract
    • Confirm contract term, expiration and renewal options

Discuss frameworks to ensure project quality

Before you proceed with any further discussions, it’s important to understand how any promises the provider has already made will be kept. In most cases, vendors should already possess industry recognised certification to prove the excellence of the work they’re going to be providing, so ask for that evidence in this section:

  • Define how the quality of results will be guaranteed
  • Discuss certifications possessed by the provider that backup their claims
  • Enquire as to the processes that have been historically followed by the provider to ensure quality
  • Establish specific deliverables and define how the performance of these deliverables will be reviewed, tested and measured

Talk about technology

The final point you should endeavour to discuss is the technology the provider uses to keep things productive day to day. Here, you will likely get an extra insight into their security infrastructure and benefit from an overview of the compatibility between all of your tools. And even though you’re coming to the end of the checklist, don’t rush through this part—the technology at play will go on to define much of your working relationship moving forward. Therefore, to end, discuss the following:

  • Define the status of the teams dedicated to company software
  • Ask provider to describe their availability to develop, deploy and upgrade new technologies
  • Establish overview of vendor’s partnerships with technology providers (Microsoft, Oracle, IBM, etc.)
  • Ask provider to discuss previous large-scale software projects they have been involved in in the past
    • Ask to see examples of specific lines of code they produced
  • Get an overview of tools used by the company to write, gather and report on code
  • See an itemised list of tech tools used by the company and the tasks they are used for

Round up

After running through this checklist with any potential provider, you should now have a solid overview of the entire eco-system that will define your working relationship moving forward. You should have a clear-cut impression of what they can deliver—and a clear-cut impression of what you can reasonably expect. If you have any further questions, speak to the experts. We know how to better hire, manage and expand your teams offshore. Therefore, if you’re looking to grow your organisation in one of the most efficient ways possible, get in touch with us today. We offer a free, 30-minute consultation to see whether offshoring will work for you organisation. Just click below to book your appointment.

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