How do you find the right outsourcing service provider?

Use an ideal provider profile

First of all, it is essential for the client to draw up a profile of the ideal provider before contacting anyone. What type and range of specialist skills are necessary and in what quantity? If the provider experienced any shortfall in numbers and quality of specialists once the project was underway, would you be willing for sub-contractors to be used? Do you feel it is essential for the service provider of your non-core function to have worked for clients who are direct competitors in your core functions? In other words, is it important that they understand your business? What parameters do you wish to place on the size of potential service providers – does this refer to the total number of people they will put on your account or to the total number of staff they employ?

Invariably when you start to meet with potential service providers some of the parameters set will probably need to be adjusted, but it is still beneficial to do an ideal profiling exercise because it saves time and narrows the search. European public sector organizations are frequently forced to find outsourcing service providers by placing announcements inviting tenders in the European Journal. Even then it makes good sense to have completed this type of exercise before the potential providers respond.

For most private sector organizations it is a question of finding out who the most suitable providers are and then approaching one or more. These days it is easy to find relevant service providers. A few minutes on the internet should uncover more than you would ever want to talk to. Before you contact a service provider it is obviously desirable to get as much information about the company as you possibly can to compare with your ideal profile. This will take a little more time but the information necessary to narrow the search is likely to be found on the internet. Quite often the service providers’ websites will contain snippets from articles they have featured in, statements regarding the areas they specialize in and, increasingly, case histories.

It is therefore possible to isolate a significant number of service providers in this way and many will appear to be a reasonable match with the ideal profile set. This is inevitable as most providers claim expertise over a wide range of activities.

Speak to existing clients

Other sections of this book deal with pros and cons of dealing with just one or multiples of providers. But, however many providers you contact, it is a good idea to ask each of them for permission to speak to at least one of their existing customers about the service they are currently receiving. Service providers don’t enjoy being forced to make such introductions. Not all their clients will be happy with the service they are getting and there will be natural concern as to how many times you can keep bothering even the most satisfied of clients. Nevertheless, the service providers do accept that a potential client is contemplating a very risky venture over a relatively long period of time and is therefore justified in taking whatever steps it can to safeguard itself. Consequently, a good many potential clients do make these requests and the providers normally do their best to satisfy them.

Not surprisingly then, the service provider’s ’flagship’ clients often find themselves dealing with such enquiries on a very frequent basis. It is not unusual to find that these flagship clients are not necessary those receiving the best service, but the ones that have said the nicest things about the provider on previous occasions. In making such enquiries of an existing client it is well worth considering that the person you are talking to will normally be hoping for an ever improving service and will have few, if any, reasons for upsetting the provider, even if the service is not what is desired.

Armed with such knowledge, some potential clients have approached the flagship client with very detailed written questions aimed at forcing a truthful answer. In my experience this does not usually work, as the flagship client makes excuses about sudden pressures of work and resorts to very brief and vague answers.

It is usually better to adopt what will be seen as a softer approach. For example, if the first question is ’Has the service provider matched its promises and your expectations?’ the person expected to answer is already under pressure and will probably immediately paint the provider’s performance more favourably than was originally intended. After that, the person being questioned is very likely to go on giving the provider undue praise. On the other hand, if the first approach adopted the marketing intelligence reasoning by starting with a question such as ’What would you change if you had to do it all again?’ the threat largely disappears. Answering this type of question does not necessarily imply criticism of the provider and consequently the interview gets off to a pleasant start and the potential client has the opportunity to learn much more about the provider’s actual performance.

It will be particularly important to devise questions aimed at the provider’s current workload. The provider may not have told the potential client that it has just won several major new contracts, which will all begin shortly, but that information will very likely have filtered through to the existing client’s internal management from contacts with the provider. Contact with the service provider’s existing clients is the best way to obtain information on the short- and medium-term suitability of potential providers.