How to Build an Effective Outsourcing Strategy?

Updated April 24, 2024

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As a company decision maker, you constantly seek ways to boost growth, optimize efficiency and cut costs, right? Well, lucky you, because outsourcing has emerged as a go-to strategy for hitting these targets. But, crafting a winning outsourcing plan demands careful thought. Don't sweat it, we're here to walk you through the crucial steps to shape an outsourcing strategy that syncs with your company's goals.

Globe with arrows representing the benefits of global outsourcing: cost savings, scalability, efficiency

Grasping the Basics of Outsourcing

Before we jump into the nuts and bolts of forging an outsourcing strategy, it's vital to grasp the weight of outsourcing and how it can propel your organization. Outsourcing means handing off certain business functions or processes to external providers, often in different countries. By doing so, you tap into a global talent pool, slash costs, ramp up scalability and rev up overall operational efficiency.

In fact, our work with clients like Cornestech proves a smartly built order tracking system using Angular and ASP.NET Core can dramatically boost on-time deliveries and operational efficiency.

How Outsourcing Fuels Business Growth

Get this: research shows companies that embrace outsourcing can see faster growth and fatter profits versus those that don't. By outsourcing non-core activities, you free up internal resources and zero in on strategic moves that propel your company onward. Plus, outsourcing lets you flex operations up or down based on market demands, giving you an edge in today's fast-paced business world.

Pinpointing Your Outsourcing Needs

Checklist of tasks suitable for outsourcing, including routine, repetitive, and specialized activities

To shape an effective outsourcing strategy, pinpoint which tasks or processes in your organization suit outsourcing. This step calls for a deep dive into your business operations to spot areas where outsourcing can deliver the most value.

Weighing Tasks for Outsourcing

When sizing up tasks for outsourcing, weigh factors like complexity, cost-effectiveness, strategic importance and the availability of specialized know-how. Routine, repetitive tasks needing specific skills often make prime outsourcing candidates , especially if an external provider can handle them more efficiently and cost-effectively.

Take our project with TBS Global. By building a robust, secure and scalable ASP application tailored to their needs, we helped boost productivity and efficiency versus their prior systems.

Gauging Your Company's Outsourcing Readiness

Before diving into outsourcing, gauge your company's readiness and capacity to support it. This means assessing your internal processes, systems and resources that will smoothen collaboration with an outsourcing partner. Think about aspects like data security, legal compliance and the willingness of internal stakeholders to back the outsourcing initiative.

Picking the Right Outsourcing Partner

Choosing the right outsourcing partner is a make-or-break call that can seal the fate of your outsourcing strategy. When vetting potential partners, seek a company with a track record of delivering top-notch results, domain expertise, scalability and a commitment to long-term partnerships.

Handshake symbolizing a partnership with the ideal outsourcing provider, committed to delivering results

Key Criteria for Selecting and Outsourcing Provider

To lock in a successful outsourcing partnership, consider these key criteria when picking a provider:

  • Reputation and experience in your industry
  • Ability to understand and align with your company's goals
  • Flexibility and scalability to handle changing needs
  • Solid communication and collaboration processes
  • Cultural compatibility and shared values

Fun fact: The Philippines, known for its strong cultural alignment with Western business practices and high English proficiency , has risen as a leading outsourcing services destination.

Over the years, we've had the privilege of partnering with clients across various industries, delivering custom solutions that drive their success. From the membership ecosystem we built for PHR CLUB using C#, ASP.NET Core MVC, Xamarin and MySQL, to the mobile app we developed for Otsuka using C#, Xamarin and SQL Server, our expertise spans a wide range of technologies and business domains.

Crafting a Comprehensive Outsourcing Plan

Once you've nailed down your outsourcing needs and picked the right partner, it's time to craft a comprehensive outsourcing plan. This plan should spell out the goals, expectations and strategies for seamless collaboration with your outsourcing provider.

Setting Clear Goals and Expectations

Kick things off by defining specific, measurable goals you aim to achieve through outsourcing. Whether it's cost reduction, efficiency gains or service quality boosts, clearly communicate your expectations to your outsourcing partner. Set a timeline for hitting these goals and establish realistic milestones to track progress along the way.

Building Effective Communication and Management

Effective communication forms the bedrock of a successful outsourcing partnership. Set up clear communication channels and regular check-ins to discuss progress, tackle concerns and iron out any wrinkles. Put in place performance metrics and key performance indicators (KPIs) to objectively gauge your outsourcing partner's performance and keep it aligned with your company's objectives.

In our experience, setting up dedicated communication channels and regular status updates has been key to the success of projects like the web-based knowledge retention application we developed for Peak Revenue Group. By keeping lines of communication open, we made sure the application streamlined their risk management workflows and reporting, ultimately boosting knowledge retention among their users.

Putting Your Outsourcing Strategy into Action

Gears meshing together, symbolizing the smooth implementation of an outsourcing strategy for seamless operations

With a rock-solid outsourcing plan in place, it's go time. This phase involves handing off the identified tasks or processes to your outsourcing partner while ensuring a smooth integration with your existing operations.

Ensuring a Smooth Transaction

For a smooth transition, craft a detailed plan that maps out the specific steps, timelines and responsibilities tied to transferring tasks to your outsourcing partner. Offer comprehensive training and support to guarantee a seamless knowledge transfer and minimize any disruptions to your business operations.

Tracking and Evaluating Performance

Keep a close eye on your outsourcing partner's performance against predefined metrics and KPIs . Put in place a robust monitoring and evaluation system with clear expectations, measurable targets and effective reporting mechanisms. Pinpoint areas for improvement, tackle performance issues promptly and nurture a culture of continuous growth and innovation.

Throughout our years of experience, we've seen firsthand the importance of regular performance monitoring and evaluation. When working with clients like Children to Love International, our .NET-based donation processing system not only ensured PCI compliance but also provided automated reporting for transparency. By continuously measuring and optimizing performance, we helped them score year-over-year growth in online donations.

Wrapping Up

Building an effective outsourcing strategy is a critical step towards driving business growth, maximizing operational efficiency and gaining a competitive edge. By grasping the power of outsourcing, pinpointing your specific needs, picking the right partner and putting a comprehensive plan into action, you can unlock the full potential of outsourcing to hit your company's goals.

As the demand for outsourcing keeps climbing, it's worth noting that the IT Services market in the Philippines has been seeing steady growth, fueled by factors like rising demand for digital transformation, growing adoption of cloud computing and government initiatives to boost the IT sector. By teaming up with a reputable outsourcing provider in the Philippines, you can tap into this thriving market and leverage the benefits it offers.

This article is part of the Outsourcing series. Read more on how we craft tailored Outsourcing solutions - driving efficient growth, hassle-free:

Frequently Ask Questions (FAQ)

How can outsourcing help my company save on expenses?

Outsourcing lets you tap into cost-effective labor markets and trim overhead costs tied to in-house operations. By outsourcing non-core functions, you can optimize your resources and funnel them towards strategic initiatives that drive growth and profitability.

When picking an outsourcing partner, weigh their reputation, domain expertise, scalability, flexibility and commitment to long-term partnerships. Look for a provider with a track record of delivering high-quality results, robust communication processes and cultural compatibility with your organization.

To guarantee a smooth transition, craft a detailed plan that maps out specific steps, timelines and responsibilities tied to transferring tasks to your outsourcing partner. Offer comprehensive training and support to smoothen knowledge transfer and minimize disruptions to your business operations.

Set clear performance metrics and key performance indicators (KPIs) that sync with your company's goals and objectives. These may include measures like cost savings, quality of deliverables, response times and customer satisfaction. Regularly monitor and evaluate your outsourcing partner's performance against these metrics to make sure they're meeting your expectations.

Set up clear communication channels and regular check-ins with your outsourcing partner. Use a mix of email, video conferencing, project management tools and face-to-face meetings to keep collaboration seamless. Set expectations for response times, progress updates and issue resolution to maintain open, transparent communication throughout the outsourcing relationship.

With our deep understanding of the outsourcing landscape and proven track record of delivering exceptional results, Cambria is well-positioned to be your trusted outsourcing journey partner. Our experienced team is dedicated to helping you navigate outsourcing, mitigate risks and maximize benefits for your business. Partnering with us lets you focus on core competencies while we handle the rest, enabling you to drive innovation, improve efficiency and achieve strategic objectives. Contact us today to learn more about how we can help you unlock outsourcing's power and take your business to new heights.

Partner with Cambria for Expert Software Development Outsourcing

At Cambria, we understand the unique needs of decision makers like you. With our 40 years of expertise in software development outsourcing, we're ready to help you drive growth, maximize efficiency and save on development costs. Our tailored solutions are designed to meet your specific requirements and align with your company's goals.

As a trusted outsourcing partner, we offer three flexible models of cooperation to suit your business needs. By partnering with Cambria, you can save 60-80% on development costs while accessing a team of highly skilled software developers. We pride ourselves on delivering high-quality solutions, reliability and professionalism in every project we undertake.

Take the first step towards transforming your business operations and gaining a competitive edge.Request a Free Quotetoday and discover how Cambria can help you achieve your outsourcing goals. Let us be your trusted partner in driving business growth and success.

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About Cambria Software

We have been providing custom software development services since 1984, offering expert programming in multiple languages to build high-performance websites and applications for our clients.

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Our experts in various programming languages and tools enable us to provide custom programming services that create tailored software solutions for our clients, ensuring the highest quality of service.

Our engagement models guarantee excellent service, and our history of success makes us the go-to choice for all software development needs. We are a leading authority in software outsourcing, providing unparalleled customer service.

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