Outsourcing some of your startup business operations is an effective way to increase your reach and capacity. But it can also be a significant undertaking. Thus, you would want to make sure that it would succeed.
Here, you will likely ask yourself what you need to accomplish for that to happen. So, we at Virtua Solutions give you a checklist of things you need to have. Note that this might vary a bit depending on the nature of your outsourcing effort. But these are the main ones that you should prioritize.
Outsourcing Checklist no. 1: Your Startup Business Outsourcing Goals
The first item that your startup business needs to have in its outsourcing checklist is its goals. These will guide everything from your choice of providers to the interaction strategy with your chosen partner. As such, you need to define these as clearly as possible.
When defining your outsourcing goals, start by stating the main ones. The question here is what function outsourcing will play in your business. For instance, you might intend to use it primarily as a means of increasing your workforce.
Note that you might have several goals in mind. Pick one and build the others around it. That makes it more manageable since you can focus on what to prioritize.
Subgoals
Once you have the main goals, you can start determining the different sub-goals to help you achieve these. In this, you go into the specifics of the outsourcing plan. some of the questions you might ask include:
- What are your main technical requirements?
- What are the possible additional requirements you might have?
- What specific tech skills or expertise will you need?
- What size of team will you need?
- Do you need the outsourced team to be directly managed?
Note that the list of questions will vary. By answering all of these, you can create the initial outsourcing plan.
Outsourcing Checklist no. 2: The Request For Proposal
The request for proposal, or RFP, is the document that outlines what you need and serves to attract bids from potential providers. There are several parts of the document that you need to have.
- A description of the services they offer: You would want to know the main services that match your needs and any other relevant services.
- Financial information: See if the outsourcing company is financially stable enough to handle a project of your scope.
- Their teams: Look into the team compositions and the technologies that the4y are equipped with to see how they will fit your needs.
- Legal background: Check the provider’s incorporation details to ensure that it is a legitimate business.
When outlining these requirements, you need to be as specific as possible. This will help you weed out any offers that might not fulfill your business requirements. The document will also help you ensure that any potential provider can adapt to any changes that your startup business might implement later.
Outsourcing Checklist no. 3: Provider Assessment Plan For Your Startup Business
While the above item would help you create a shortlist of potential outsourcing partners for your startup business, you still need to scrutinize each more closely. Thus, the next item you need for your outsourcing checklist is an evaluation plan. This plan will consist of several sections focusing on the different aspects of a candidate provider.
Background And Capabilities
In the first part, you need to review a candidate’s background and capabilities. Note that you will already have some idea of this based on the info they provided in their proposal. Using this info, dig deeper into their business history to see how often they have worked with companies similar to yours.
Some of the questions that you would want to ask at this point are:
- What is the size of your company?
- What technologies do you offer and what is your experience in these?
- Do you use subcontractors for any client work?
- How many clients have you worked with?
- Which regions are your clients from?
- Have you handled projects similar to ours?
Aside from these questions, you can also ask more specific ones about the project. Those will help you gauge their more project-centric capabilities.
Processes And Tools
The next bit you would want to look into in the review is the providers’ work processes. For this, probe how the team manages the different requirements. You also need to look into what industry standards they follow. Inquire about their tools as well to determine compatibility with yours.
Beyond these, you would also want to look into the reporting process the provider employs. As with the above tools, you need to ensure general compatibility with your reporting tools. You also need to look into the escalation process they use for issues.
Company Culture
The last bit to look into in your provider assessment is company culture. Ask the provider to elaborate on their management style. Explore their relationship with employees. For example, see if they can freely talk to the management about concerns.
Additionally, you should know more about their core values. You want a provider that has values relatable to your startup business. That does not necessarily mean that they should be similar. But you want a provider that can quickly jive with your team.
Outsourcing Checklist no. 4: Risk Assessment For Your Startup Business
While outsourcing offers plenty of benefits for your startup business, it also has risks. Do a full risk assessment before pushing through with the project. Here are some of the elements that you should take into account.
Image from LinkedIn.
Intellectual Property Protection
Look into how providers safeguard your IP and its related materials. This can include services such as them taking care of IP registration. You should also see their data protection strategies.
The Local Legal System
This is especially important if you are outsourcing to a foreign country where the legal jurisdiction for such firms is vastly different. In this case, you might want to ask candidate providers if they have legal teams of their own. Depending on the situation, they can handle some of the legal concerns as part of the outsourcing deal.
Currency Stability
If you are outsourcing to a foreign country, currency fluctuations can be a problem. The change in the value of the currency you are paying the provider in can result in higher charges. As such, you want to outsource to a country with a stable value.
Conflicts Of Interest
One thing to keep in mind is that conflicts of interest can come in varying degrees. For instance, some of their clients might turn up to be direct competitors to you. Get full disclosure from providers about such conflicts and how they will handle them.
Outsourcing Checklist no. 5: A Transition Plan For Your Startup Business
The last item you need to have on your checklist is a transition plan to outsourcing. This plan will detail the movement of tasks and responsibilities from your internal team to the provider. It also contains the steps to make the transition possible.
There are four such steps you want to incorporate into your plan.
- Pre-contract: This stage covers the verification of all the requirements and documentation submitted by your chosen partner before contract signing.
- Transition manager selection: This person will oversee the transition into the outsourced work and will serve as the liaison between the pre and post-outsourcing teams.
- Transition structuring: You may employ different strategies to facilitate the transition depending on your needs.
- People management: Minimize the disruptions the transition might bring into your business.
Note that the way you execute these steps can vary for different providers. As such, you should have a detailed plan for each partner you enlist.
Keep Your Startup Business Outsourcing On The Right Track
Practicing due diligence in accomplishing this checklist will help your startup business succeed in outsourcing. We at Virtua Solutions understand it well and make it a point to help you accomplish this. Sign up with us today and we will guide you to success.