Many small businesses are looking to outsourcing as a means to reduce outgoings. But how can SMEs and start-ups make a success of a practice traditionally reserved for big business?
Ten top tips on how to make outsourcing pay:
1. Clearly define your project and set out what you want before opening it up to proposals. Poorly defined briefs tend to attract low quality proposals and can often end up as much larger, and so much more costly, projects than anticipated.
2. Don’t just go with the first offer. If possible get a selection of proposals from both the UK and overseas, and evaluate them.
3. Don’t just decide by cost: look at other factors including experience, references and communication amongst others.
4. Come up with a shortlist and don’t be afraid to negotiate to get the best possible deal.
5. Get references from people who have used the supplier before; you can ask who they’ve worked for in the past and get in touch yourself. Don’t forget references provided by the supplier are only going to be positive so try to dig around for more.
6. Once a supplier has been selected, make sure the full agreement and the payment terms are set out clearly in the contract: misunderstandings can prove costly and time-consuming.
7. Negotiate potential copyright and ownership rights upfront and make sure anything that is produced becomes your property on payment. In the case of web-based products, make sure that final files and source codes are transferred onto your own server so you can control future changes.
8. Agree procedures from the outset in terms of communication, project management, delivery and feedback and ensure these are adhered to.
9. Be aware that deviating from the agreed contract once - be that by allowing late delivery of work or agreeing to early payment - is likely to result in accepted practice. Only make one-off concessions if you are prepared for this to be acceptable in the future.
10. Finally, don’t forget to leave honest feedback, even if this is negative. Remember how valuable feedback was to you in choosing a supplier.
Many small businesses can find it difficult to know where to start when it comes to outsourcing. We’ve seen that often when outsourcing fails it is down to poor planning which can result in unforeseen costs and over-running projects.
Carefully consider the entire process, from supplier choice to payment and timescales right through to copyrighting and ownership, problems can be avoided and the project can succeed in saving the business valuable resources.
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