Barney Jeffries explains how to find the outsourcing partner of your dreams (and offers some relationship counselling along the way).

 
Business is full of one-night stands and casual flings – those service providers we use for a single job, or the suppliers we phone from time to time. Outsourcing is different. It’s a long-term relationship – you have to work at it. If all goes well, it can bring both parties happiness and fulfilment – but there’s heartache if things go wrong.

 
The Infatuation Stage

It’s easy to fall in love with the idea of outsourcing. You can focus on your core business, while specialists take care of technical or non-strategic aspects. Whether it’s accountancy or IT support, sales or health and safety compliance, outsourcing allows you to tap into professional expertise and increase your offering, while benefiting from economies of scale, reduced costs and increased flexibility. What’s not to love?

But remember: only fools rush in. You should think carefully before making a long-term commitment – particularly to a partner who might not share all your values. Are you sure you want to hand over control of part of your business to someone else? Will quality suffer? Would you be better off developing talent internally? Outsourcing should be about more than just cutting costs: marrying for money rarely leads to happiness.

Dating

Once you’ve decided you want to outsource, play the field for a while – don’t just jump into bed with the first company that comes along. Get to know your new prospective partner, and go back to their place if you can. Watch them at work, take a tour of their premises. Are the staff happy? What’s the IT equipment like? Does the company have a good cultural fit with yours? If you discover the business equivalent of the embarrassing DVD collection or the offensive political opinions that come out after the second bottle of wine’s been opened, or if things just don’t feel right, make your excuses.

Find out the gossip

Whether it’s talking to friends of friends or carrying out some sneaky internet research, it’s common dating practice to try and find out as much about a prospective partner as possible. Speak to other businesses who use, or have used, your outsourcing provider: find out as much as you can, and try to obtain at least five references. And if you meet the angry ex, proceed with caution. Asking for a bank reference is usually considered a dating faux pas, but it’s vital in this context: having your outsourcing partner go bankrupt could be disastrous for your business.  

Meet the friends and family

Friends and family have been the ruin of many a promising relationship. You may get on brilliantly with your outsourcing partner, but what of their suppliers and partners? You need to be able to ensure that ethical standards are met right the way down the supply chain. If you think a prospective partner is hanging with the wrong crowd, you have two options – walk away, or try and persuade them to change their ways.

All about trust

You wouldn’t give your credit card details and a spare set of keys to somebody you’ve only just met. Be sure you can trust your outsourcing partner: in many cases, they will have access to confidential and commercially sensitive information. Are you happy to share this with them? If they will be dealing directly with clients, do you trust them to represent your company?

We need to talk

You need to be clear about what you want to get out of the relationship. Set out your business and ethical objectives clearly, and make sure the supplier understands and buys into them. Lack of communication leads to misunderstandings, so make sure you keep in close contact. It’s a good idea to have one person in your company who is responsible for liaising with the provider.

The pre-nup

It’s not very romantic, but before you tie the knot, make sure you sign a pre-nuptial agreement – or in this case, a service level agreement (SLA). This should specify exactly what services the supplier is providing, the level of service that is expected, the timescales and costs involved, areas of responsibility, confidentiality clauses, performance reviews, dispute resolution procedures… in other words, it needs to be as comprehensive a contract as possible.

It should, however, be flexible and subject to renegotiation. Don’t commit for richer and poorer, in sickness and health: business circumstances change, and it’s important that your SLA can accommodate this. It’s also vital to build in an exit strategy: if things don’t work out, you need to be able to part on amicable terms, and not be faced with a messy divorce case and a hefty settlement.

Happily ever after

It’s estimated that nearly half of all outsourcing deals, like marriages, end badly. But don’t let that put you off: those that do last the distance can be hugely beneficial. Both parties flourish: they know each other’s wants and needs instinctively, trust each other implicitly and are happy doing their own thing for the common good, like an old married couple.