5 Steps for Choosing the Best Outsourcing Services Provider for Your Business

5 Steps for Choosing the Best Outsourcing Services Provider for Your Business

Outsourcing has revolutionized the business model. The key to success depends on finding the right outsourcing partner. Due to wide popularity, more and more service providers offer outsourcing services. Outsource Data Processing Services has become a popular choice for businesses of all sizes. However, with an abundance of options to choose from, there is an inherent risk of the quality of services being poor.

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. There are companies which claim that outsourcing leads to underperformance and there are always risks of becoming a victim to online scammers. Outsource Data Conversion Service 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 to be maintained and costs get reduced while the level of productivity increases. But, one thing remains and that is the importance of finding the right outsourcing service partner. The following 5 steps will help you select the best outsourcing partner.

1. Identify the Needs of the Business

The first step requires one to answer why they want to outsource. It could be any of the following.

• Improvement of Work Quality: Highly specialized tasks could be outsourced which require attention and time to be more effective. Some of these are telemarketing, digital marketing and customer support.

• Boost Productivity: Besides just outsourcing the non-essential tasks, departments like Finance, IT and Human Resource can also be outsourced. It helps re-align the core functions of the business and to focus on core competencies.

• Reduces Cost: One of the main reasons why businesses outsource in the first place is due to cost reduction.

2. Research the Outsourcing Service Provider

Pakistan and Thailand are one of the emerging outsourcing destinations. Pakistan has quickly become reputed for telemarketing and customer support, while Thailand is known for back-office support.

However, both of these countries have a rather large pool of outsourcing service providers. It can be difficult to choose the right vendor. This is why you need to conduct research. The following tips will help you find 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: Social media is your best friend when it comes to finding the right outsourcing vendor. You can join groups and ask for recommendations. There are even outsourcing groups on LinkedIn. Engage with the 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, chances are that your associates or friends might have hired an outsourcing company. Make sure to ask for recommendations from them.

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

3. Send Requests

Have a list of at least 3 prospective outsourcing service providers in place. Then communicate with them and ask for 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 both 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, do not 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 you require the team to answer. Make sure to research the questions beforehand. The following topics should be covered in the questions.

  • Disaster Recovery Planning
  • Cultural and Social Nuances
  • Succession Planning and Current Career Programs
  • Orientation Programs and Current Training
  • Performance Evaluation and Grading Processes
  • Organizational Culture
  • Technological Profile
  • Frameworks, Processes and Systems
  • Integrity and Data Security
  • Hiring Process
  • Timeline

5. Contract Negotiations

Finally, the service providers should be ranked according to an order of 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)

Now, it is also possible that the outsourcing vendor has a set of contracts in place. However, it is best to stick to a single contract. Remember, contracts are negotiated. Hence, all of the provisions in the outsourcing vendor’s contract can be negotiated, discussed and modified.

Make sure that the Service Level Agreement defines all of the conditions for breach of contract, pre-termination of services and the penalties for each breach. This would act as an Exit Strategy from the outsourcing agreement if the deliverables are not 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, pricing alone is not the only factor that should be considered for choosing the outsourcing partner. Instead, look at the overall value proposition which the outsourcing partner presents to you. Outsourcing is an effective solution when facing uncertain times. It not only helps the business survive in times of volatility, but it allows the business to thrive.

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