1. What are your core strengths and which processes are you thinking of outsourcing? Why?
2. Have you calculated the costs of doing the function in-house? Include hidden costs such as office space and staff costs.
3. Check the return on investment (ROI) – ask potential service providers for help, as many offer an ROI calculator.
4. What are the costs of not outsourcing? Will your business suffer because it cannot afford to invest in the expertise, technology or the facilities that an outsourcing partner might provide?
5. Have you checked that any potential supplier is capable of limiting your costs? Ensure they’re not solely interested in gaining your business, only to increase your costs over time.
6. When looking at outsourcing, you should also ask yourself:
- Am I prepared to spend the time and energy required to manage the outsourcing relationship?
- Are my expectations of the benefits/costs realistic?
- Is the function a key task that my business needs to control directly to ensure its future competitiveness?
7. Finally, weigh up the risks of outsourcing against those of keeping the processes in-house.