The Right Fit

Many organizations have embraced outsourcing strategies for several key areas of their business, especially for back-office finance and accounting processes, human resources, and IT staffing and services. However, while outsourcing continues to become more prevalent, many companies do not understand how to successfully manage a third-party relationships. They often lack effective oversight and controls to understand whether they are receiving the expected value from their service providers and if their provider is the right fit.

Here are four points to consider in evaluating your current provider and whether or not they are the right fit for your business.

How to select your provider

You must go through a thoughtful process to ensure the provider understands your expectations upfront and that the level of work necessary is clearly defined.

In addition to scoping challenges, some outsourcing providers may not be a fit from a culture perspective. An outsourced provider is an extension of your organization, so an initial evaluation process must consider how a potential partner aligns with your goals and values. Perhaps most importantly, your outsourcing provider must be scalable, with its processes and capabilities available to expand along with your expected growth.

You must go through a thoughtful process to ensure the provider understands your expectations upfront and that the level of work necessary is clearly defined.

How to manage your relationship with your provider

Unfortunately, some providers become complacent over time, and you may not be getting the same level of service in later years as you were in the beginning. The value and strategic advice from the relationship may slowly diminish if your organization is not keeping an eye on the provider.

Regular communication with your provider, should be made to ensure consistent  and optimal service.

Does your provider understand your business

Some outsourced providers are simply a better fit for a company in a certain industry or of a specific size. Your provider must know your business and how you plan on growing in order to deliver strategic advice. The outsourced function should support your business strategies. However, if your third-party provider does not have a deep understanding of what you are trying to accomplish and how the business works, it cannot provide effective advice. If your provider lacks experience in your industry, it will be hard for it to be relevant and provide truly strategic advice.

Is your provider still meeting your expectations

Regardless of the qualifications or capabilities of your outsourced provider, you must evaluate your vendors periodically to ensure they align with your industry’s demands, as well as your short- and long-term goals. If you are unsure whether you are getting the most out of your outsourcing investment, an assessment from an experienced advisor can uncover any potential issues or inefficiencies. This process can help ensure that your provider’s capabilities match your needs, and you are receiving the right level of service.