10 steps to outsourcing success

Attempting to outsource or offshore your business functions without a plan, is like trying to cook a seven-course meal with nothing more than a camp stove and a single fry pan. It’s not going to be easy.

To help ensure your outsourcing journey runs smoothly, we’ve identified 10 key steps every business should follow. When done correctly, each will deliver a tangible result, moving you a step closer to outsourcing success.

1. Set outsourcing goals and establish rules for success

Your approach to communicating your outsourcing plans to your onshore team will depend on their position in your business and their openness to change. Here are a few suggestions for how you can help them feel comfortable about adding an offshore team:

• Explain what's in it for them: they might not have to do as many manual tasks, like data entry, because those types of tasks are ideal for offshoring
• Tell them about the benefits for the business and customers: this might include providing better customer service, delivering results faster, being more competitive or generally boosting profits
• Reassure them: let them know that their jobs are safe and that you're not trying to replace them. You're simply trying to scale your business in a way that's efficient and more profitable - a sustainable business will keep their jobs secure, long-term
• Let them know you'll need their help: with the coming changes, you'll all need to work together on systemizing as much of your business as possible, so you can welcome and train your new employees
• Show them what it will look like and educate them: remove some of the mystery around offshoring by sharing behind-the-scenes tour videos of potential offshore providers, interviews and articles that explain what's involved and the benefits.

Above all, try to be transparent with your team. A common reason organizations fail when attempting to outsource comes down to not making key stakeholders and staff feel involved with the process. Try to look at things from their perspective. They might have heard negative things about offshoring and they'll need your reassurance. Talk to them, listen to their concerns and be prepared to answer their questions. Once they see the benefits and understand exactly what's involved, they'll likely be keen to get involved and help out.

2. Assess current systems and processes

A lot of businesses struggle with systems and processes. They feel they don't have the time or expertise to choose and integrate the right solutions and they often don't feel it's a very high priority.

When most of the work is done by a handful of people, everyone's very familiar with how things are done. They know their own processes inside-out and they've been working together long enough to learn each other's processes too. So there's no perceived need to formalize, document or automate much. But you can't run a business like that long-term. And you certainly can't run it like that if you plan to scale or offshore.

If you're planning to offshore, it's better that you consider your systems and processes now. Because once you hire your first offshore employees, they'll have little to no prior knowledge of your business, and they'll immediately need to know what to do and how to do it.

The key is to ensure your CRM and business systems are universally accessible. You need to ensure that you have reliable systems in place to support your business processes. A system can be as simple as ensuring that your training library or client management database is updated regularly. This ensures the information your team has access to is the most accurate and all the documented business processes are up to date.

Make sure you do your research to find the tools that work best for your team. The main thing is that you're using the technology to help your team easily and securely access the information they need and do what they need to do, no matter where they're located.

3. Craft effective offshore job descriptions

Once you've identified the roles you want to offshore, it is time to establish job descriptions for your ideal offshore candidates. Hiring an offshore team is not that different to hiring onshore. In your job description, you need to include, at a minimum:

• Experience needed
• Skills needed
• Expected tasks and responsibilities
• Benefits of working for your company.

You then give that job description to your offshoring partner or BPO, or alternatively, if you don’t have job descriptions, your offshore provider can help guide you in creating them. They'll use that info to search the local labor market and find candidates who match the skills and experience you're looking for. They'll filter a large pool of candidates and present you with the top options so you can choose the best person for the job.

Note: If you don’t have job descriptions, your offshore provider can help guide you in creating ones that will attract the best talent for the position(s) you want to offshore.

Learn more about building a team from scratch with our “How to build a team with MicroSourcing” eBook.

4. Implement offshore management protocols to monitor performance

Managing offshore teams effectively is like managing any other team. It involves clear communication, defined responsibilities and fostering a sense of belonging. Here's how to integrate management protocols with performance monitoring:

• Define clear roles and responsibilities for offshore team members, along with key performance indicators (KPIs) aligned with organizational goals.
• Focus on outcomes rather than micromanaging tasks. Trust your offshore team to deliver results and provide support as needed.
• Allow offshore team members the flexibility to work in a manner that suits them best. Empower them to make decisions and take ownership of their work.
• Implement robust communication systems to ensure seamless collaboration and alignment. Regularly update offshore team members on project status, expectations and changes.
• Continuously monitor the performance of offshore teams against established KPIs. Use performance data to identify areas for improvement and provide timely feedback.
• Treat offshore team members as integral parts of the organization. Foster a sense of belonging by involving them in team activities, recognizing their contributions and valuing their input.

By integrating these management protocols with continuous performance monitoring, you can effectively manage offshore teams, drive performance and ensure they are fully engaged and aligned with organizational objectives.

5. Move to the cloud

Cloud-based computing means you can store, manage and process the data in your organization via the internet. It is a lot more cost-effective as it eliminates the need to build a server and have physical IT infrastructure in place. 

Cloud-based computing allows organizations to move their business processes offshore easily without having to move any hardware offshore. You can also do this with your training library and your CRM - where you store and manage all your customer details. Your team, both onshore and offshore, will be able to access the data they need across the business, as well as the software they need to complete their tasks at any time.

6. Document internal processes

You need to train and communicate your expectations to your offshore team, and to do so, you need to make sure you have documentation on how to carry out tasks related to your core business functions. 

Begin by creating a list of your business functions, and then detail all the processes relative to those functions. Having a good understanding of what you do and how you do it is extremely helpful when working out which teams or roles to build offshore versus what you would like to keep onshore. Document everything you do in your business - and how you do it. 

Documenting your processes will help you see which tasks can be offshored and which ones can't be (the ones that are difficult to systemize and predict). Here are some typical examples of starting points for documentation:

• The customer journey (from initial inquiry to final purchase)
• How to deliver products and services (from purchase to final delivery)
• How to submit documents to relevant regulatory bodies
• Payroll, accounting and finance processes
• The customer complaint-resolution procedure
• How to guide to handling IT support issues
• Marketing and communication across all channels.

The next step is to map out your business processes. Organize this information to make sense to someone new to your business - they will know explicitly what you do, when you do it and how you do it. You might use the following formats to organize your information:

• Create flowcharts and diagrams
• Make lists
• Record screencast videos using a tool like Zoom
• Record videos of you addressing the camera directly
• Write tutorials and step-by-step instructions.

Now that you have a good understanding of your business functions and have documented all the business processes involved, it becomes easier to reference these processes for training. By having all the information stored in a database or library everyone in the organization has access to, you have created a quick reference for training.

7. Choose the right outsourcing model

Before partnering with a provider, familiarize yourself with the four different outsourcing models. Decide which best suits your business’ needs and seek the help of a provider offering that model

Offshoring can be broken down into four models: 

• Project-based outsourcing: you pay an offshore freelancer to complete a project for your business. It’s worth they are not dedicated solely to your business
• Traditional outsourcing, also known as Business Process Outsourcing (BPO): you pay an overseas company to handle absolutely everything related to your offshore operation
• Offshore company incorporation: you set up an overseas division of your company, and you handle everything yourself, including facilities, IT, labor laws, recruitment, HR and payroll, as well as day-to-day quality and productivity
• Managed services offshoring: you form a partnership with an offshore provider in the offshore location to set up an overseas division of your company and get them to handle facilities, IT recruitment and HR, while you handle quality and productivity. 

Each of these models has its own pros and cons, and not all are appropriate for every business.

Our “Choosing the right offshoring provider for your business checklist” can help you match your business needs with a suitable partner.

8. Research and vet potential offshore partners 

There can be a big difference between the experience levels of one provider versus another. We've been operating in the Philippines since 2006 so we're one of the longest-running and biggest offshore providers with over 6,000 staff and 400 clients.

With experience, you get a number of advantages, including:

• Greater stability
• Deep local knowledge and better integration into the local community
• Demonstrated experience in filling very specific roles for your specific industry
• A large database of qualified job seekers
• Experience working with businesses at all levels.

Stability is also an extremely important factor when it comes to choosing your offshore partner. After all, you're at the start of what will (hopefully) be a long and profitable relationship for your business. While offshoring is a strong and growing sector, especially in the Philippines, sometimes things can happen to rock the boat if your partner isn't prepared, like:

• Currency changes - significant increases and decreases can negatively affect business
• Outages and tech issues - your offshore partner should have risk management procedures in place to minimize any potential disruptions
• Business continuity  - good offshore providers will have comprehensive business continuity plans in place - it’s worth asking any prospective offshore partner what they specifically have in place.

To gauge the stability of your service provider, ask them questions about how long they've been in business, how steady their growth has been and whether they've experienced disruptions to their services over the past few years. Take this information into consideration when you decide which offshore provider to work with.

9. Navigate cultural and geographic differences 

It’s important to understand that, no matter where you decide to go offshore, there is a likelihood that the country you choose may have different cultural, social, economic and geographic standards to what you are used to back home.

Take the Philippines as an example. A few differences between Western and Filipino cultures that can affect operations and are important to be mindful of include:

• Their timezone is GMT+8, which can affect working hours and availability, however, their working hours can be adjusted according to business requirements to accommodate the need for 24/7 customer support as an example
• They experience yearly typhoons, which can cause issues for businesses that are not effectively prepared for business continuity in such scenarios 
• They're extremely team-oriented, which means they might not feel as comfortable taking the lead on a task or working independently
• They're good listeners but may need a lot of prompting to provide you with direct feedback and ideas, even when they have something valuable to contribute
• They usually communicate less directly than Western employees, and may feel embarrassed by a direct or public approach to feedback.

The right outsourcing provider manages these cultural differences by adapting their recruitment and management approach. For example, here at MicroSourcing, we aim to be our clients' partners on the ground and experts in the local market. We're always happy to provide advice and help smooth things out if teams experience any friction due to cultural or geographical differences.

Learn more about the culture of the Philippines in our “Rediscovering the Philippines” eBook.

10. Enhance security policies

It’s important to know whether you have the licenses, permissions and certifications to offshore specific tasks or confidential information offshore and online. This can come down to the very nature of your business. Suppose you are going to have to share confidential client data with an offshore provider. In that case, it’s important to understand the legal implications of this and whether your clients will agree to have their information exported offshore. A great way to instill confidence in those who may not have heard of offshoring before is to ensure that your data security systems, policies and processes are up-to-date. While offshore providers are experts at ensuring data security for their clients, you must research the licenses you may need to send information to a third party and get permission from relevant internal parties.

Learn from your peers

Outsourcing has been a key to success for countless organizations that have benefited from its potential to reduce employment costs by up to 70%, improve efficiencies and provide the support needed to overcome unexpected hurdles and pursue business growth.

This eBook showcases 12 in-depth, real-life examples of how offshoring in the Philippines has reaped rewards for organizations in industries as diverse as healthcare, eCommerce, insurance and tourism. 

Last update 18 July 2022