In a world of cut throat competition, cost efficiency is a key to success and profits.
Hence outsourcing overseas becomes an important decision for most firms, who are looking to save costs with economical labor and specialized functions.
However, outsourcing the right kind of work to the right kind of vendor for the right cost is not the easiest of tasks, and involves various factors and the firm's priorities.
One of the most important factors for outsourcing overseas is the quality of the vendor's work.
One must consider the vendor's standing in the field and the quality of work that they have delivered in the past.
The demand for a vendor in the market could be a good indicator of the impression they have created.
Young vendors are an unknown force and could sometimes backfire, but the fact that they would cost less makes them a good bet depending on how they fare in initial discussions.
Outsourcing overseas is also a matter of how two different cultures gel.
If the work ethics and priorities of the vendor do not match with that of the outsourcing firm there is a good chance of the partnership failing to produce the desired results.
The vendor should be sincere and determined to make a good job out of the contract rather than just be eager to bill exorbitantly for everything.
The risk management of the vendor is also important.
A vendor should not be overly dependent on some main resources and be nimble in replacing lost resources.
This determines their true value to a client's project.
Such vendors are more reliable as they eliminate unpredictability from a project.
Outsourcing overseas is also dependent on the laws in the vendor's country against data theft.
There should be a good legal foundation to punish breaches as intellectual property is invaluable and also a great tempting source of income for some of the vendors.
Hence mutual trust, which is a hard quality to acquire, should be worked up.
The accountability of a vendor and their risk appetite also determine how well they could serve the client's purpose.
The vendor should be proactive and take up ownership of the task rather than participating with the attitude of paid labor.
Such ownership will auger well for the projects or tasks that have been outsourced.
Outsourcing overseas for cost saving shouldn't come at the cost of quality and should be a way of tapping talent from specialized vendors instead of worrying about all tasks.
Outsourcing overseas leads to tapping talent and resources from various regions and hence is a good way of dissipating risk involved in business concentrated in one place.
However the deal itself shouldn't be a risk in itself.
Rather it should be a risk mitigating factor with quality services at lower cost, so a client can focus on what it is best at doing.
Most clients look to develop long lasting relationship with a vendor as it takes a lot of time to imbibe the culture, the working style and communication aspects prevalent in a particular firm.
It is a delicate but significant decision that can have long lasting impact in a firm's growth.