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5 Steps to Choosing the Perfect Outsourcing Provider for Your Company

Outsourcing has revolutionized the business model. Thus finding the right outsourcing partner is essential to achieving your business goals. No matter what size your company is, outsourcing is for everyone. Choosing an ideal service provider is crucial.
The main reason why companies outsource is to take advantage of cost reduction. In the competitive world of today, pricing plays a huge role. Hence, the market for outsourcing services is cutthroat. However, this provides businesses with the opportunity to thrive due to low prices. Some companies claim that outsourcing leads to underperformance, and there are always risks of becoming a victim to online scammers. Outsource Data Conversion Services to ensure the quality of work is maintained.
Despite what the critics might say, outsourcing provides companies with many benefits. In times of economic downturn, outsourcing offers an opportunity for businesses to shine as profitability gets maintained and costs get reduced while productivity increases. But one thing remains the importance of finding the right outsourcing service partner. The following 5 steps will help you select the best outsourcing partner.

1. Identify your business needs

The first step is to explain why you wish to outsource. Any of the following could be the case.

• Work Quality Improvement: Highly specialized jobs that require attention and time to be more successful could be outsourced. Telemarketing, internet marketing, and customer service are a few examples.

• Increase Productivity: In addition to non-essential work, departments like finance, IT, and Human Resources can be outsourced. It aids in re-aligning the business’s essential functions and focusing on core strengths.

• Lowers Costs: One of the primary reasons why firms outsource in the first place is to save money.

2. Do some Research on Your future potential Outsourcing Partner

“A little research hurt nobody.”

Choosing the appropriate vendor might take time and effort. This is why research is required. The following pointers will assist you in locating the best vendor.

• Contact Local Regulating Agency: Ask for referrals or recommendations by contacting the local regulating agency. The agencies tend to have many outsourcing companies as active members.

• Go through Social Media: You can join groups and ask for recommendations. There are even outsourcing groups on LinkedIn. Engage with members to learn from their experiences and ask for referrals to reputable outsourcing companies.

• Ask for Recommendations from Associates and Friends: Since outsourcing has become extremely popular, your associates or friends might have hired an outsourcing company. Make sure to ask for recommendations from them.

• Conduct Due Diligence: Conduct due diligence once you have some outsourcing service providers on your list. Google is your friend.

3. Send Requests

Have a list of at least three prospective outsourcing service providers in place. Then communicate with them and ask them to submit a Request for Quotation (RFQ) and a Request for Proposal (RFP).

A Request for Information or RFI form might be sent before the service provider complies. It is a highly detailed form that includes specific and general questions on the outsourced projects of the vendor. The RFI will be your reference guide for making the RFQ and RFP.

4. Start the Qualifying Process

Once all of the RFPs have been received, only eliminate a service provider due to pricing or its contents. Keep in mind that everything is negotiable. The quotation can be adjusted when the service provider has more details on the needs of your business.

Audio-video interviews should be scheduled with the outsourcing team. Have a list of questions in place that require the team to answer. The following topics should be covered.

5. Contract Negotiations

Finally, the service providers should be ranked according to preference. Initiate contract negotiations and prioritize negotiations with the outsourcing vendor. The following contracts would need to be submitted to the outsourcing service provider.

  • Schedule of Payments
  • Scope of Work
  • Confidentiality Agreement (CA)
  • Memorandum of Agreement (MOA)
  • Service Level Agreement (SLA)

The outsourcing vendor may have a set of contracts. However, stick to a single agreement. Contracts are negotiated. Hence, all the outsourcing vendor’s warranty provisions can be arranged, discussed, and modified.

Ensure that the Service Level Agreement defines all the conditions for breach of contract, pre-termination of services, and the penalties for each violation. This will act as an Exit Strategy from the outsourcing agreement if the deliverables still need to be met.


When it comes to selecting an outsourcing service provider, there needs to be a process followed. The above steps can be used to find and hire the best outsourcing services provider for your business. Remember, more than pricing alone is needed for choosing the outsourcing partner. Instead, look at the overall value proposition the outsourcing partner presents. Outsourcing is an effective solution when facing uncertain times. It helps the business survive in times of volatility and allows it to thrive.

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