3 Main Issues to Settle in an Outsourcing Deal

Many entrepreneurs would agree that setting up strong business partnerships early on determines the success or failure of outsourcing services. As complexity arises from the negotiation process, operations and day to day management; identifying evident issues can significantly help to increase the chances of ensuring a successful outcome. According to Kit Burden of TechRepublic.com these are the […]

Many entrepreneurs would agree that setting up strong business partnerships early on determines the success or failure of outsourcing services. As complexity arises from the negotiation process, operations and day to day management; identifying evident issues can significantly help to increase the chances of ensuring a successful outcome. According to Kit Burden of TechRepublic.com these are the three main aspects to note in an outsourcing deal.

Customer and Supplier Commitment

In outsourcing, trust is difficult to define for both parties. Resentment usually arises at certain point of the deal as one party or both have failed to deliver their promise. For instance, a client’s negligence might have provided inadequate information for its service requirements but pursued outsourcing firms to bid. The issue may not raise concern to both parties temporarily but definitely will cause glitches in future.

On the other hand, a staff leasing services provider may misprice a deal because of the complexity of its requirements. The outsourcing provider then will remove the lost margin by adding additional costs to the estimates. The play of interest between clients treducing costs and the employee leasing firms opting for additional charges are typical. However, these scenarios if not mitigated can lead to shorter term contracts aside from the ill feelings from both sides.

Differences could be resolved easily if only the two parties reach efforts to compromise and remains trustworthy, in a sense that neither is trying to profit unduly from the other.

Transaction Transparency

Transparency is a big issue in every business undertaking as clients demands it. More than being honest, open and accountable, it requires responsibility from the both sides to secure validated information and reduce doubts. And although it sounds redundant, many clients raise complaints to their staff leasing services provider due to their dubious pricing mechanism. Transparency in this sense means that the outsourcing firm is ready to present accurate information based on the services provided.

In contrast, although it is understandable that certain information must remain confidential on the part of the clients, timetables and plans that may concern the outsource service provider should be shared to minimize breaches of contracts.

Adaptability

Amidst the security that a contract brings, provisions must be ready to adapt for sudden changes. Furthermore, an appropriate governance structure should support it ; flexible rates in cases of future fluctuations and the service requirement and features the rights in cases of early termination.

It is important to understand that relationships and dealings don’t have to be only confined to legal agreements. As in the future, contracts can simply be a subject to the attitudes and the proceedings of the both sides. With such reason, upon the draft of the contract; both parties should note their future priorities to minimize complaints and operations delay.

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