Many entrepreneurs would agree that setting up a strong business partnership early on can determine the success or failure of outsourcing services. As complexity arises from the negotiation process, operations and day to day management; identifying evident issues can significantly help to increase the chances of ensuring a successful outcome. According to Kit Burden of TechRepublic.com these are the three main aspects to note in an outsourcing deal.
Customer and Supplier Commitment
In outsourcing, trust is difficult to define for both parties. Resentment usually arises at certain point of the deal as one party or both have failed to deliver their promise. For instance, due to negligence the client might have provided inadequate information for its service requirements but pursued outsourcing firms to bid. The issue may not raise concern to both parties temporarily but definitely will cause glitches in future.
On the other hand, a staff leasing services provider may have mispriced a deal maybe because of the complexity of its requirement or the client's transition. The outsourcing provider then will seek to remove the lost margin by adding additional costs to the estimates to deal with the changes. The play of interest between the clients to reduce costs and the employee leasing firms opting for additional charges are typical. However, these scenarios if not mitigated can lead to shorter term of contract aside from the ill feelings it generated from both sides.
Differences could be resolved easily if only the two parties reach efforts to compromise and remains trustworthy, in a sense that neither is trying to profit unduly from the other.
Transparency is a big issue in every business undertaking as clients demands it. More than being honest, open and accountable, it requires responsibility from the both sides to secure validated information and reduce doubts. And although it sounds redundant, many clients raise complaints to their staff leasing services provider due to their dubious pricing mechanism. Transparency in this sense means that the outsourcing firm is ready to present accurate information based on the services provided.
In contrast, although it is understandable that certain information must remain confidential on the part of the clients, timetables and plans that may concern the outsource service provider should be shared to minimize breaches of contracts.
Amidst the security that a contract brings, provisions must be ready to adapt for sudden changes. Furthermore, it should be supported by an appropriate governance structure; flexible rates it cases of future fluctuations and the service requirement and features the rights in cases of early termination.
It is important to understand that relationships and dealings don't have to be only confined to legal agreements. As in the future, contracts can simply be a subject to the attitudes and the proceedings of the both sides. With such reason, upon the draft of the contract; both parties should note their future priorities to minimize complaints and operations delay.