The Top Ten of Outsourcing in India: Resources in Outsourcing - Top Ten Questions Asked by Customers

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6.6 The Top Ten Questions Asked by Customers

The business processes and strategies in the outsourcing industry are in their developmental stages. Companies planning to outsource need to make the right choices and take calculated risks to ensure success. Outsourcing relationships can succeed when there are no ambiguities in the overall plan of work. Listed below are 10 questions, which any manager planning to outsource must ask the vendor.

6.6.1 Do you have the capability to deliver quality output for such a project? What is the kind of work experience your company has? - This fundamental question should be addressed to any consultant / company being considered for outsourcing. Capabilities include the skill set of the professionals and their individual experience on projects of similar nature as the one being considered for outsourcing. Also, details of experience of the company in delivering project of similar scale and nature are must to understand the functional capabilities. The credibility of the company in professional circles and its global profile is also an important consideration.

6.6.2 What are the data security strategies and privacy policy of the service provider/ vendor? - Many projects, which are outsourced, have certain personal data of employees or customers to be transferred to the vendor. In such cases, it is important to understand the processes a company has to protect client data. A vendor should have the basic infrastructure (access controls, data encryption etc.) and human resource related systems (pre recruitment background checks, non disclosure agreements etc.) and procedures in place. The vendor should have a privacy policy which the organization follows and should not further outsource work to a third party without due security considerations.

6.6.3 What is the Life cycle cost of the outsourcing venture? - Cost savings is the prime reason for outsourcing. Keeping in view the fact that the vendor has experience in working on a similar project, he should clearly provide all cost components: visible (consultancy, licensing etc) and invisible (training, infrastructure maintenance, travel etc) that may arise during the course of the project.

6.6.4 Do you have the kind of infrastructure set up and manpower resources to meet the requirements of the project being outsourced? - Outsourcing projects differ in terms of the infrastructure and manpower requirements. It is important to understand whether the vendor
can address infrastructure issues (e.g. dedicated server, data base server, type of server technology you would want the vendor to use) and has the resilience to withstand manpower attrition.

6.6.5 Has the vendor transparent working and legal documents in place? - Vendors need to be clear, prompt and transparent in their financial dealings. It is best to check with past references on this aspect. Also, the vendors must provide information with respect to legal documents and regulatory permissions to avoid any controversies or legal issues at a later date (permission for use of premises for commercial use, environmental clearances, registration with tax authorities etc.).

6.6.6 Are you conversant with the culture and professional practices? - A company working in the global arena needs to be aware of the work styles and cross cultural understanding to facilitate smooth working. Vendors need to be conscious of this requirement and willing to train the team, if required.

6.6.7 How much control would I have over the processes once I outsource? - The balance of control must be pre-decided and adhered to. The vendor should agree to periodic checks, random visits, regular updates and interactions with the project team.

6.6.8 How would managers at the outsourcing firm handle customer complaints? - This is an important and critical area. The managers at the outsourcing firm will handle customer complaints at the first level. However, all email correspondence on customer complaints and feedback should be available to the parent company to address any critical issues.

6.6.9 What are the major risks involved in outsourcing to this particular vendor and country? - Aspects related to security, intellectual property, disaster recovery and business continuity should be evaluated specially when outsourcing work to another country. The vendor should be able to address all these issues to minimize business risks.

6.6.10 What happens if there are delays or I do not like the quality that you deliver? - This should not happen if one is considering an experienced vendor. Agreements need to have penalty clauses with respect to poor quality of work, delays in schedule, security breaches etc.