If you run an online business, you should learn about outsourcing. Outsourcing is when a company hires another individual or company to perform a specialized task, whether it’s making a product or providing a service such as human relations or information
If you run an online business, you should learn about outsourcing. Outsourcing is when a company hires another individual or company to perform a specialized task, whether it’s making a product or providing a service such as human relations or information technology. When businesses need expertise or skills that they don’t have within their organization, they often turn to outsourcing to solve their problems.Outsourcing can bring positive impact on your bottom line as well as effectiveness of team.
According to Gallup Research, 54% of traditional U.S. workers “sleepwalk through their day” and an additional 18% actively sabotage other workers. Outsourcing certain tasks that are outside core competencies of your business can be a win-win situation: it shortens the time for both the employee and employer to find each other, and allows them to collaborate on projects immediately.
A good starting point is to understand why the firm would like to outsource a service and what resources are available to successfully carry out an outsourcing project. There are potential drawbacks too. Many companies observed a couple of common mistakes in this regard: a bandwagon effect in which firms outsource because the competition does so (also known as ‘me too’ strategy) or firms outsource ‘a problem’.
These are the wrong reasons to outsource a service, and the consequences can be dire. nstead, firms should follow a systematic approach to analysing the context of the outsourcing activity. There are several criteria that a firm should examine, including the overall goal, how critical the service is to competitive advantage, how dependent the service is on other inputs from the firm, how work will be codified and monitored.
Outsourced service functions can include:
– Call centers
– Payroll and bookkeeping
– Advertising and public relations
– Building maintenance
– Consulting and engineering
– Supply and inventory
– Field service dispatch
– Food and cafeteria services
– Fleet services
Finding an external team might be challenging. One of the best ways to do that is by referall, word of mouth or even previous experience of other companies you might be partnered with. Apart of that there’s a number of portals dedicated to matching service providers with potential buyers or vice versa. Place your project requirements and receive detailed bids on projects from a pool of talent. The bidders maintain a full online profile complete with feedback and ratings from previous clients. The portal acts as a go-between, ensuring tasks are completed and payments are made as contracted.
The top portals currently trending are: oDesk and eLance. Both provide reach functionality to get you started with your first outsourced assigment. Using either of the service above you typically write a brief description of the work you would like done, select the skills you require, decide whether you would like to hire someone on an hourly or fixed-price project basis and post your job. You may be on a budget, and every successful business needs to operate within the confines of that budget. If a contractor feels like they’ve been pushed too far to give you a bargain, you might just get bargain work in return.
Within hours, you will receive proposals from online workers with details on what work they will provide and their price for the assignment. You can view each candidate’s profile and review samples of work, current and past work history, as well as ratings and feedback from former clients. It’s that simple. Once you find the right online worker, which sometimes happens within hours of posting your job, you are automatically assigned a virtual workroom that helps both parties track work in progress and stores all the communication and files related to the job.
You need to be strong on basic communication tools as well as more advanced tools for detailed project tracking. You might also want deploy a larger set of tools like bug tracking (like: Jira, Trac or Mantis) and discussion forums (like: BBForums, Yammer)
1. Keep a skype chat room open at all times to maintain the feeling of constant communication as if you are working in the same room.
2. Use JingProject.com or another similar tool for communicating about designs and creating quick videos to communicate with your team.
3. Use some sort of time tracking to gather detailed information about what people spend their time on doing and manage the readings.
A business owner or manager typically contracts out certain tasks that they’re too busy to take care of themselves. Therefore, it can be disappointing when the contractor doesn’t immediately hit the ground running. However, your freelancer can only be as successful as the time your company is willing to invest. When outsourcing relationships work, they can deliver value well beyond your initial expectations. There are few key areas you need to be having a closer look in order to maintain good relationships with your partners or freelancers:
Communication is the holy grail of outsourcing. Without a clear-cut communication between you and your outsourced provider, your project is doomed before anyone can work on the task at hand. While outsourcing is done to mainly cut costs and improve the bottom line, efficient communication becomes less of a priority and this is why many outsourced teams get lost in translation.
Outsourcing only works well if the offshore team stays motivated. It’s easy to loose interest, sense of direction or even motivation for an external team. Making sure the team feels included on the daily life of the company/customer, and understands the overall vision helps in keeping the team motivated, as well as with their understanding of the features to be developed.
Motivation actually works two ways. You, as a client/employer, must motivate your workers/employees and service providers/workers must be enthusiastic about work, to make things work seamlessly. There can be no other way. ‘Boring’ or mundane jobs are just a matter of perspective. Change the mindset and the attitude towards work.
There are also some standard measures you can undertake to make sure your outsourced team stays motivated:
1. Help them grow. We have a path of promotion from worker to reviewer to team leader to area leader to trainer, etc. Our technology also intelligently routes progressively harder and challenging (and more $$ rewarding) tasks to those workers who have a proven history of accuracy.
2. Make it fun. The software interface our workers use is built with gamification in mind. We have many more ideas in the pipeline to make the whole experience feel more like a game than tedious work.
3. Pay well. Don’t pay the minimum but set your pricing to clients such that you can pay a fair and attractive wage to your workers. Also bonuses for overtime, exceptional work, etc are a great way to show you notice their hard work.
4. Community. We had an initial trial of 25 workers where we introduced our 40 Character Principles and leadership training component. Teams of 5 met weekly for 2 hours with half the meeting focused on discussing a character principle and setting a practical goal taking more ownership, etc.
One of the most critical capabilities that outsourcing clients need to develop is learning. And still, clients tend to take a narrow approach to learning by focusing on learnt lessons from a single outsourcing arrangement and often paying little attention to building a learning capability across multiple outsourcing arrangements. Furthermore, clients often apply all their resources to ensure that vendors meet the service provisions while ignoring opportunities to learn from them.
There are few things that you need to take extra care of in case outsourcing goes wrong, something happens within outsourcing partner’s company structure or in case personal situation of the freelancer changes.
1. Protecting your intellectual property
Before entering into an outsourcing arrangement, first determine the extent to which local law protects your IP. Armed with this information, make sure your outsourcing agreement has a well-drafted, bullet-proof intellectual property provision that clearly define the intellectual property to be protected.
After determining what legal protections the laws of the host country provide, include an affirmative representation and warranty of the supplier to adhere to those laws. (However, don’t limit yourself to only the protections afforded under local law; be as broad as applicable law will allow.)
2. Ensure Data Privacy
The protection of customer or employee data, particularly when it comes to transferring personally identifiable information internationally, such as a customer’s or an employee’s name, social security number, or home address has emerged as a major challenge for those interested in outsourcing HR functions or customer service capabilities due to a growing number of cross-border restrictions. The most widely accepted basis for permitting the transfer of information, regardless of jurisdiction, is obtaining the data subject’s consent. Therefore, obtain written consent from the data subject prior to transferring information to a third-party supplier.
3. Require Consent for Subcontracting
While it’s not unusual for suppliers to turn to subcontractors to assist with a project, it’s also not unusual for the supplier to subcontract one or more functions without notifying you. To protect yourself, always be sure that your agreement includes a section on subcontracting rights that carefully spells out when and where the supplier can subcontract. Be sure to include the following provisions: Make sure the supplier can only subcontract with your written consent. Retain the right to review the terms of a subcontracting arrangement before it is entered into. Require the supplier to remain contractually liable for the functions that are subcontracted.