Top 10 Outsourcing Tips During Recession
During these uncertain economic times, organizations are striving to cut down on their operating costs. You might already be successfully outsourcing, but you may be wondering if you can make additional cost savings. The following top 10 tips can help you save more during these lean times.
- Assess your existing outsourcing contract: Read the entire contract again and examine the major expense components. Are you bearing the entire expense? Negotiate with your outsourcing partner about the shared expenses and also ask your provider if costs can be cut down, so as to enable you to continue outsourcing your work.
- Select a less expensive outsourcing model: For example, if you are outsourcing your customer support, check your outsourcing contract to find out if you are paying per minute or per call. Instead of paying per minute, you could pay per call and thereby reduce costs. Find out which outsourcing model is more cost-effective. Discuss this with your vendor and change your agreements to save on costs.
- Change your outsourcing location: Unlike in the past, there are several outsourcing locations which have a low cost labor market. Changing your outsourcing location may not be easy but it will help you save costs during these tough times. You could also check with your outsourcing partner if they operate from other locations, so that you can shift your work easily.
- Don't outsource all your services to one location: Have you been outsourcing all your services to a single provider in one location? This may prove to be very costly. Find out offshore locations where your work can be done at a cost-effective price. Distribute your work to different locations, where you can get the best price for a particular service. This can go a long way in helping you save on costs.
- Ask for lower costs: Your customers might be ruthlessly asking you to reduce your costs during this economic crisis. Now is the time to return the favor to your outsourcing partner. Explain the situation to them and ask them to reduce their costs. Tell your outsourcing provider that you can continue working with them only if they reduce their costs.
- Cut down on communication costs: Though it is important to communicate to your outsourcing partner, you might be spending too much on your phone calls, shipping or internet access. Discuss with your outsourcing provider on how best you can resolve this problem. Find out on which area of communication you are spending the most and try to cut down costs in that area.
- Travel less: Cut down on your travel expenses and you can find that you have saved a lot. As along with travelling you will also have to spend on lodging and food. Reduce the number of face-to-face meetings with your offshore provider. Find a cheaper alternative like video conferencing that can help you cut down on unnecessary travel.
- Consider locations closer to you: Although outsourcing your services to an offshore provider can help you save on costs, you maybe also paying for several hidden costs which come by working with a provider at the other end of the world. You can consider onshore or nearshore outsourcing. Although the cost of labor might be high, you can save on the hidden costs that you would have to spend if you outsource your services to an offshore provider.
- Share your technology: Are you paying for a particular tool that your outsourcer has to use? Instead of paying for the tool, you can just provide access to your tool and your offshore provider can use it whenever necessary. Try to share your technology and software whenever possible so as to avoid unnecessary costs.
- Help your offshore partner retain people: Is your outsourcing provider finding it hard to retain people during this economic crisis? Try to help your customers resolve this problem by providing them with tips on how to cater to employee wants and ensure that experienced and trained professionals don't leave. Try to help your offshore provider with any other problems that he might be facing.
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