January 5, 2021 5 min read
Opinions expressed by Entrepreneur contributors are their own.
Outsourcing is predicted to be one of the go-to customer strategies in the post-COVID-19 world. Tight on budget and uncertain of their future, companies will opt for no-strings-attached business relationships rather than spending time and effort on in-house departments.
Almost a third of UK companies plan to outsource at least one business area following the COVID-19 crisis, especially in IT (37%) and marketing (32%). The Global IT outsourcing market is predicted to grow by $98 billion during 2020-2024. Сloud-based outsourcing is the most promising kind since it was the only one that increased by 7% during the second quarter of 2020 when others faced a decline.
Since COVID-19 pushed the adoption of remote work, many companies overcame a fear of lack of control and communication friction. With the opportunity to cut expenses by 20-30%, looking into outsourcing may be a good business decision. But it needs to be made wisely since outsourcing has faced the same challenges as other businesses during COVID-19: shift to remote work, client base restructuring, infrastructure changes, mental wellbeing of employees, etc.
Here are four tips on how to choose your outsourcing partner in 2021.
Check your outsourcing provider for security certifications
Cloud-based outsourcing providers are gaining more popularity since they provide a wide range of flexibility. However, data security is still the main concern for companies that consider switching to the cloud. When partnering with as-a-service companies, be sure to ask for evidence of their data security.
A great example of such evidence is an internationally acknowledged security certification. The most well known is ISO27001 — an information security management standard by the International Organization for Standardization. It applies to financial information, intellectual property and external data from partners of the company. It also ensures the protection of information shared by and with third parties.
This certification is not required by law, but it ensures that the holder is applying the best security practices.
Inquiry about infrastructure resilience
COVID-19 shutdowns impacted the main geographical outsourcing centers. People were unable to commute to their offices, had no equipment to take home or had no stable internet connection. It affected the quality of their services as well as increased the risk of sensitive data exposure. By now, most companies have worked out their remote work model and updated security policies. But the future is still uncertain. Before partnering with an outsourced provider, make sure they have adapted their infrastructure to the new conditions: provide the team with WFH equipment, organize a socially-distanced workplace for those who must come to the office, have a backup plan if one of the team members catches the virus, and have someone to check on the on-site servers and other pieces of equipment.
Don’t hesitate to inquire about the details of the business continuity plan (BCP) and its execution. Ask your future partner if that plan has ever been tested and if it was updated according to the new challenges of the post-COVID-19 world. “Better safe than sorry” makes sense for business now more than ever before.
Opt for flexibility of conditions
An unpredictable future makes businesses change their priorities, placing flexibility at the top of them. If you’re not sure about your outsourcing needs, don’t sign up for multi-year contracts. Choose partners that provide the option of month-to-month cooperation and a variety of service packages with a wide price range. The subscription model of outsourcing will allow you to opt-out of contracts without severe consequences and adapt cooperation with your provider to your changing needs.
Another thing to avoid is a minimum commitment to the amount of business, revenue or fully-employed people. Outsourced providers try to safeguard their revenue and plan their staffing by inserting minimum commitment clauses in contracts. But in these times of uncertainty, no business can be fully sure of their future earnings, yours included.
Pay attention to employee’s wellbeing
Usually overlooked, employees’ well-being should be a key factor in choosing an outsourcing company. Cheaper labor cost is the main reason businesses decided to outsource in the first place. When people are the major asset of your partner, you need to pay attention to how they are treated. With a work-from-home situation, mental health pressure is higher than ever. Make sure that the outsourcing company has programs to ensure the well-being of its team and provides it with all the necessary equipment.
Since the quality of outsourced services directly depends on the people who provide them, ensure that corporate culture is supported even in remote work conditions, and your partner’s team stays motivated and connected. Don’t hesitate to ask the provider about the working conditions and how the company ensures smooth communication within the team.
Outsourcing could be a business decision that will make your company come out of the crisis stronger. But finding an outsourcing partner can be tricky and has to be done smartly. Following these recommendations will prevent your business from making typical mistakes and protect your negotiating position with the future partner.