Dmitri Lepikhov December 28, 2021 Outsourcing is a global economic driver. With business process outsourcing estimated to hit $ 113 billion revenue in 2021 — a number close to the net worth of Bill Gates — outsourcing helps 59% of businesses of all industries and sizes facilitate organizational processes.
Deloitte’s 2020 Global Outsourcing Survey further shows that mid-pandemic, outsourcing has become a cost-cutting and organizational flexibility tool for over 70% of studied companies. At the same time, every second company dealing with contractors cites “quality of service” as their biggest obstacle to productive outsourcing, turning what could have been a positive experience into a chase-and-run after desired results.
What can business leaders do to bring back positivity into their outsourcing experience and ensure safety? Based on my experience, here are four simple ways to raise the quality of service on outsourced projects, avoid running into fraud, and improve privacy in your organization.
1. Define standards and expectations
An outsourcing provider doesn’t exist in the same dimension of values as company employees. Regular employees, including remote ones, can be motivated through a combination of professional, financial, and social incentives; outsourcing providers are self-regulated “lone wolves” and have variable ethical standards and working schedules. Moreover, contractors work with a variety of customers and have little to no investment in each client’s company culture.
For me, the best solution is to match working standards and expectations, including crisis management, from the start. Entrepreneurs should select contractors who are genuinely compatible with in-house standards of work. For example, businesses in industries like technology and IT, or any others that handle unpredictable situations (relating to their industry, clients, or business operations) should prioritize outsourcing providers whose working mode can quickly adapt to their level of volatility.
In our company, we define standards and expectations from day one by probing outsourcing candidates on the following points: “How do you adjust to changes you have no control over?”, “What is your working process like?”, “Tell me about working for a client with a similar business environment”. This helps predict how well the contractor matches our established working standards and lets us choose the best candidate from the start.
2. Evaluate core emotional intelligence
Positive communication, motivation, and self-management are the standard “green flags” of an emotionally intelligent outsourcing provider. But hiding in their limelight is a priceless and overlooked quality: self-awareness. A lot harder to fake, self-awareness is a profound emotional intelligence (EQ) indicator that can be evaluated even by a solopreneur.
In our company, we often play out the following scenario: “Let’s say you’ve taken on a project from us which you’ve misevaluated time-wise. The deadline is tomorrow, but you realize you need an extension. How do you handle the issue?” If you see someone who beats about the bush shouting about their responsibility while their replies come down to an attitude of denial with a refusal to model the situation, consider the test failed. A response you’re looking for is the “show, not tell” attitude. A trustworthy outsourcing candidate would admit they never had a problem like that (or alternatively, relate a similar case and solution) but would then intelligently model the “emergency” situation.
What does this behavior demonstrate in terms of essential soft skills and why is it important? It predicts the person’s ability to understand and control emotions in conflicting situations, handle possible criticism, and communicate a positive angle on challenging issues. Such self-awareness skills are the mark of emotionally mature, responsible contractors. You can count on them to work out any issues in a collaborative, open frame of mind, instead of a passive-aggressive, unpredictable attitude.
3. Trust but curate
Most businesses employing outsourcing are involved in hybrid outsourcing projects. These are projects where tasks are shared between your in-house team (including remote workers) and the freelancer/contractor/outsourcing firm. With such projects, what usually happens is that a single project manager is assigned for managing both the in-house team and outsourcing. This is a habitual mistake that usually leads to poor results.
What our own team found appropriate was to assign a so-called “outsourcing curator” – a term I coined to denote a dedicated intermediary between the in-house team and outsourcing. An outsourcing curator is someone from our company’s side whose job is to provide necessary information to the outsourcing team or contractor, enforce privacy, handle and mediate communication, and resolve issues between the two teams.
Unlike the project manager, outsourcing curators aren’t head to toe involved in project tasks. Their focus is to maximally facilitate the hybrid working process and mitigate outsourcing risks through consistent control. This ensures that the whole outsourcing process is gently but confidently guided instead of tyrannically controlled when things spin out of control.
4. Map out your privacy strategy
Every company considering outsourcing needs a privacy strategy in place. While most entrepreneurs generally rely on a Non-Disclosure Agreement (NDA) and Non-Compete Agreement (NCA) to protect their work, especially regarding Intellectual Property, I always keep in mind that an NDA by itself isn’t enough to shield a company’s privacy. It’s strongest only as part of a multi-level privacy strategy.
For example, regardless of your industry or project, access to company resources should always be measured in proportion to the task at hand. While it may seem more time-consuming and demands more communication to work with outsourcing in stages, it safeguards a company against privacy leaks and works hand-in-hand with milestone payments that protect you from untrustworthy contractors.
The Scope of Work is another privacy agreement that can protect against fraud. I suggest making this document as detailed as possible. An outsourcing provider has no knowledge of your company or its background processes, so you may need to explain things that are self-evident for your team and even put them down on paper.
Last but not least, when working with offshore contractors, outsourcing firms, or freelancers, have all documents, especially dealing with Intellectual Property (e.g. NDA) written or checked by an international business lawyer to match the laws of the country where the outsourcing is based.
Conclusion
A positive outsourcing experience comes down to the combination of intelligent hiring, aligned expectations between the two parties, and staying in control of the situation through wise guidance and privacy strategies. This allows even a small company to largely benefit from outsourcing as risks are pushed to the minimum and productivity is raised to a higher power.
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