3 Elements That Makes Outsourcing Work

Last week I posted on the 5 things you can do to test if an affiliate partnership will work before you invest a lot of time and energy into a the relationship.  Another critical tool for a business owner is the ability to outsource aspects of the operation from time to time as a strategy for adding capacity.

Many owners grimace with the thought of outsourcing.  I always try to inquire why, because this could be an early indicator of problems to come.

You see, creating good outsourcing relationships are really no different than delegating internally.  The only difference is the external contract with the company providing the services vs. the internal employee/employer contract with your employees.   So, what’s missing externally may be a sign of what’s missing internally as well!

Setting Expectations for a Good Outsourcing Relationship

There are 3 key operational elements that create a good outsourced relationship.

• Deliverable Specifications
• Quality Standards
• Performance standards

Deliverable specifications help you to communicate what you need built.  This might include schematics, diagrams, a bill of materials, procedural instructions and anything else someone would need to build or deliver what you want built.  Without the “blueprints” it’s a crapshoot as to what you’ll get.

Next, you need a quality standard.  This standard communicates exactly how you will evaluate if they have delivered to your level of expectations or not.

The quality standard is usually the missing component when people have a bad experience with outsourcing.  They assume everyone works to their level of expectation.  When they don’t get what they expect they are disappointed.  If they don’t understand how they created this problem for themselves they never develop this critical skill of delegation and it comes back to haunt them in the future.

Finally, the performance standard communicates your expectation on delivery.  When do you expect it, and how should it be delivered?  If it’s over a long period of time, what kind of status reporting do you expect and how should it be communicated to you.

Pretty simple, it doesn’t get done more times than not.  Think back to a time when you asked someone to do something for you and were disappointed.  Which of these 3 things did you forget to communicate?

We do it every day with everyone around us.  We do it with our friends, spouse, and children.  So, why are we surprised when we get the same result in our business?

Share your experiences here of how you have found ways to improve your outsourcing opportunities.  How has being able to effectively outsource for needed capacity helped you grow your business?