In my last blog post, I shared with you my opinion that the No. 1 tip for outsourcing success is that before signing the deal, you actually go overseas and visit vendors on-site. But, just why is this so important?
Well, truth be told, it is actually not so important. You don’t actually need to go on-site to ensure that you are able to outsource successfully. In fact, a prudent decision can be reached through remote evaluation.
This fact notwithstanding, the reason why I so strongly advocate visiting vendors on-site is that a majority of clients are seen to be fairly negligent in their approach to outsourcing. To be frank, most clients are quite reckless; due diligence and common sense literally go out of the window. Most clients simply fail to ask, consider and answer the questions/evaluations that are indispensible for outsourcing success; a few examples being:
So, let’s take a look at the last example question, ‘what are the right parameters to determine whether a vendor is the best fit for my organization?’ Assuming that the costs involved and respective capabilities are the same, in this hypothetical scenario, when clients don’t go on-site, most (not all) clients will base their decision on
a) the limited content they read on the vendor’s website and
b) the limited interaction they have had with the vendor.
This essentially means that most clients will not take into consideration factors such as:
When outsourcing remotely, many an important consideration tend to get ignored. However, going on-site confronts you with many questions which would otherwise have not crossed your mind. A hands-on experience literally forces you to seek answers to these questions.
Let’s consider for instance the question of ‘all-round professionalism’. When you visit a vendor on-site and you see first hand one vendor providing free pick/drop off bus and cab transportation facilities and another firm not doing so, you have an adequate reason to conclude that the former has a higher level of professionalism.
In contrast to this, when evaluating remotely, often, it does not even occur to clients that they could assess a vendor along such parameters. Going on-site not only helps you learn more about a particular outsourcing business model and vendor, but also enables you to evaluate the capabilities of different business models and different outsourcing vendors more fairly.
However, client negligence when outsourcing remotely is not solely related to asking the right questions. Overemphasizing the importance of costs involved as a factor in decision making is another form in which clients’ negligence manifests itself.
As I mentioned in a previous blog post The 3 Different Types of Outsourcing Companies, clients get blind-sighted, even hypnotized, by the low rates offered by rogue outsourcing vendors. This renders them incapable of appreciating the significance of additional services (services which are often critical for outsourcing to be a success) they get in return for the higher rates of reputed vendors.
Going on-site corrects this blind sight, which in turn helps protect clients from rogue companies. The set-up of rogue vendors is quite simply diabolical. A vast majority of clients, upon visiting a rogue firm, would back out then and there. When they see rogue vendors use computers that look like they belong to the 80s and find that even basic infrastructure is amiss, the rogue vendors’ low rates no longer seem so alluring.
As I state frequently, rogue outsourcing companies simply would not exist if all clients went on-site. Going on-site ensures that for the rogue vendors, or for that matter any vendor, there is no place to hide. It goes a long way towards ensuring that everything (and not just the things that seem obvious) is in place for outsourcing to be successful.
Not only this, clients also better appreciate the efficacy and usefulness of the services offered by a reputed vendor. Having already become privy to the dismal state of affairs with a rogue vendor, the advantages and superiority of a reputed vendor stand out in stark contrast (I know this from first hand experience). In some instances, visiting a rogue vendor on-site is beneficial for a different reason. Upon observing firsthand the substandard services being provided by them, they begin to appreciate the advantages of working with reputed vendors, even though they might be charging at a higher rate for the services being offered. To cut a long story short, whilst a rogue vendor can at times beat a reputed vendor in its bid for a client contract when the assessment is done remotely, it is almost never the case when clients go on-site.
Thirdly, often a vast majority of clients have several misconceptions and apprehensions about outsourcing. For instance, a fairly big proportion of clients have fears around outsourcing and the protection of their data/IP. However, when the clients come on-site and see in person, with their own eyes, how robustly the process actually works, (as opposed to just reading about it and sometimes not even that), and the measures that have been put in place, they are able to overcome their fears.
In summary, though going on-site may not be an indispensable precondition to outsource successfully, I highly recommend it, because a lot many clients don’t know the right way to tell the difference between a rogue organization and an honest one. It ensures diligence even though you might not know what is it that you need to do to be diligent. When you see ‘outsourcing at play’ with your very own eyes, you naturally start asking questions like, ‘would vendor A’s business model prove to be more conducive for my project/work’ than vendor B’s model?’ Asking such questions is a far superior way to evaluate than looking solely at the cost of service.
However, there is one final caveat that I must add here. Whilst it is true that when outsourcing remotely, by asking the right questions you can make the right decision, it is still advisable to go on-site. In most case it proves to be a real eye opener. You learn a lot about the process, the country, the vendor and the staff. So whilst you can outsource successfully remotely, going on-site enables you to outsource even more successfully, (due to the added all-round knowledge you will gain). It is for this reason that clients with potentially long term outsourcing strategies, and who are diligent and know the right questions to ask, do not see going on-site as a redundant gesture. If you can go on-site, you most certainly should. It is always an immensely valuable experience, for all clients, irrespective of how diligent they are when approaching outsourcing remotely.