How to Evaluate an Offshore Outsourcing Vendor

how to evaluate an offshore outsourcing vendor

Deciding to outsource some or all of your company’s work to an offshore vendor can be a rewarding decision if you carefully evaluate the potential vendor. There are techniques to help you evaluate an offshore outsourcing vendor.

Outsourcing today, in many cases, means sending work to a foreign land in return for quality work at lower prices. The success of your company’s outsourcing experience depends upon your ability to do your research and homework before choosing an offshore vendor.

Why the Vendor Selection is Important

Choosing the right offshore vendor for your outsourced tasks is just as important (if not more) as hiring someone directly to work in the office. There are precautions you should take, as well as practical steps, checks and balances, to find the most proficient way to outsource.

Techniques to Evaluate an Offshore Outsourcing Vendor

1. Create an Evaluation Plan

Before you begin searching for that perfect outsourcing vendor, whether a company or individual, you’ll need to have an evaluation plan already in place. Ask yourself the following questions while designing your evaluation plan:

1. What are the skills necessary to perform the outsourced tasks?

2. What type of person or company will be best suited for my outsourced projects?

3. What is my total budget for outsourcing?

4. Which countries will be best suited for my offshore vendor search?

5. Will the vendor need to know a specific language to perform the tasks?

6. What type of security checks will need to take place before I can hire an offshore vendor?

These are questions every company should ask before beginning a search for an offshore vendor. This will enable the company to have all bases covered before getting started. There’s nothing more time consuming and frustrating than learning you’ve hired the wrong offshore vendor for your outsourced projects.

Once your initial evaluation plan is in place, you can begin your search for an offshore vendor. Make sure all of your criteria are met before even considering a particular vendor. Then, you’re ready to evaluate the actual vendor once you feel you’ve found the right one.

2. Areas of Importance

If you’ve found a potential offshore vendor, there are a few things you should confirm before making the final decision. Never be too hasty. You should approach any hiring or outsource decision with caution because of its importance to your company’s security and reputation.

Below is a list of important issues that should be addressed to ensure proper vendor selection:

3. Financial Evaluation

Find out the exact costs of your project or ongoing outsource services before making your decision. If your main goal is to save in the area of finances, be sure you are saving when all costs are considered. Make sure to factor in not only the actual labor price, but also the costs to get the work to the company or individual, the costs of receiving the work, proofreading the work, local labour regulations such as paid holidays etc. There are many hidden costs that can add up in a hurry if you’re not careful. If there will be extra costs, make sure you understand them clearly from the beginning.

4. Skills and Quality Evaluation

Verify that the vendor has the skills necessary to perform the tasks at hand. Ask for references and samples of actual work if possible. When contacting references, find out if the vendor has good communication skills when problems arise, good coordination with a busy schedule, and professional conduct. All of these qualities add up to success in outsourcing. Make sure all credentials are valid as well.

5. Personal Goals of the Potential Offshore Vendor

Speak to your potential vendor about their goals and objectives. If the vendor is not planning to work very long, and is just looking for a temporary job, this wouldn’t work if you’re looking for someone on a permanent basis. Make sure that your goals and theirs are one in the same for your outsourcing needs. It is also recommended you meet your outsourcing provider and align the expectations of what you expect from them and vice-versa. Don’t create assumptions, specially when dealing across cultures.

6. Country Evaluation

Be sure the country where the vendor lives is a stable environment politically and economically. Learn about the country’s IT policies and outsourcing history from other companies who outsource. Find out if there are restrictions or certain regulations in place for outsourcing in that particular country. Restrictions can be a good or bad thing, depending on what they are and the reasons for the restrictions. You’ll need to know these things in advance to effectively choose your vendor.

The techniques on how to evaluate an offshore sourcing vendor are designed to help you make the right decision when selecting an outsource provider. Carefully analyse your company’s needs and goals as well as the vendor’s background and goals for a successful outsourcing experience. It is essential to align the expectations of the deliverables and responsibilities.