Top 10 Tips for Outsourcing.

Courtesy: About.Com (http://entrepreneurs.about.com/cs/beyondstartup/a/uc041003a.htm)

 

Entrepreneurs and small businesspeople are always looking for creative ways to accomplish more of their business goals for less money. One strategy that can help you save time, money and frustration as you start and build your business is to outsource as much work as possible to skilled, but cost-effective, external service providers.

1. Clearly define the scope and schedule for your project

This might seem obvious, but any successful outsourced project always starts with a clear statement of what you are hoping to accomplish. Define your project requirements up front. Service providers need accurate, complete information to present you with realistic proposals and to quote you a reasonable price. Be specific about the deliverable you expect the vendor to provide. Give vendors as much information as you can about what you need delivered and the way in which you need the work done. Also, be clear and realistic about your schedule requirements - project schedules can have a huge impact on project costs.

2. Evaluate a service provider like you’d hire a full-time employee
When you’re evaluating proposals from service providers, don’t be afraid to ask questions. Just like hiring a full-time employee, selecting a vendor is a very subjective experience. Check their references and ask for feedback from other clients who have used their services. Engage in a dialog – if you have any concerns about a vendor’s specific capabilities, voice your concerns. Don’t just stew about it and hope for the best.

3. Look for specific experience fit
Ideally, the service provider you select will have specific experience with the type of project that you’re undertaking. You don’t want to be somebody’s “guinea pig.” This is especially crucial when outsourcing complex technical projects such as software development. For example, if you’re looking for someone to develop an application for the Palm PDA, make sure they’ve actually completed commercial projects on that platform for other satisfied customers. This advice holds true for other types of projects as well. If you need a business plan for opening a retail store, you’ll get best results if the consultant you hire has verifiable experience in the retail sector.

4. Don’t choose a vendor based solely on price
Though it might be tempting, never select a vendor based solely on price. Experienced buyers who have outsourced many projects and evaluated hundreds of proposals almost always recommend discarding the highest-priced and lowest-priced bid. Buyers report that their most successful projects are the ones where they felt the vendor offered a balance of good value and quality results.

5. Review portfolios and samples
Examine the vendor’s previous work (their “portfolio”) and make sure that their previous work meets your expectations for quality and style. If you’ve evaluated a vendor’s portfolio, references and previous experience and are still unsure of their capabilities, consider asking them to do a quick mock-up or provide a basic outline of a work plan. A service provider who really wants to win your business might be able to give you a rough concept so you can better understand their approach to solving your problem. But never cross the line between asking for a mock-up and insisting that a vendor provide you with finished work “on spec.” No qualified professional expects to work for free.

6. Start small
When engaging with a service provider for the first time, start with a project that is relatively small and simple in scope. This will give you a better idea of the provider’s style and capabilities before you entrust a “mission critical” project to them.

7. Tie payment to clearly defined project milestones
Just as you should be clear about project scope, make sure that you define a work plan for your outsourced project with clearly defined milestones. Having scheduled checkpoints where you review the status of the project as it works toward completion—is an easy way to ensure that you meet your final deadline and that the final product meets your standards. Tie the vendor’s payment to these milestones. A good guideline for IT and software development projects is to pay no more than 20% to 30% of the total project price up front, with the rest of the payments awarded based on the completion of 3 or 4 milestones.

8. Negotiate ownership of work up front
For any type of outsourced project, make sure that you are clear about who owns the resulting work product and any important components of that product. Make sure the service provider understands how you intend to use the deliverable that they are agreeing to provide. For example, the development of a custom software application for your personal use would be substantially different from the development an application that you intend to package and re-sell.

9. Don’t forget about support after the project is complete
For technology projects, it’s a good idea to specify a warranty or support clause so that you are assured of some amount of continuing support from the vendor after the project is complete. It’s much easier to negotiate a support clause before the service provider begins work, rather than after the completion of the project. Even creative or business services can benefit from a support clause. Suppose you need some changes to a business plan based on feedback that you get from potential investors. Or maybe you find that you need that snazzy new logo delivered in a new type of file format. Specifying some amount of free support or negotiating discounted prices for future modifications can save you time, money and headaches later on.

10. Get it in writing
During the course of a service engagement, the scope of the project, deliverable or even the agreed upon price may change. Make sure that you clearly communicate any schedule, scope or payment changes to your service provider and get confirmation from them - in writing - that they understand and agree to the changes. Similarly, keep a record of any agreement changes requested by the service provider and whether you accept or reject those modifications. Save copies of any email exchanges that you have.

You can access top-notch expertise any time you need it without the overhead of hiring full-time staff. By staying focused on your core competencies and hiring expert freelancers for your other needs, you can compete with the delivery capabilities of larger organizations while maintaining your independence.

Aria Global specializes in providing companies with I.T. and Business Process Outsourcing solutions. Offshore Outsourcing has become a very feasible trend for Organizations that are expanding or just trying to reduce their overhead expenses. Call / Email us to discuss your outsourcing needs. 

Contact: Sameer Sheth at sameer.sheth@ariabpo.com 

Accounts Payable Best Practices

Aria’s Accounts Payable Outsourcing Services Provide Centralized Control over Payables and Other Best Practices While Reducing Costs by 25% to 50% annually

Most finance organizations spend a large part of their Finance budget on processing Accounts Payable.  This is due to the largely manual effort required to enter invoices into the accounting system and, if applicable, match those invoices to purchase orders and receipts.  Yet while Accounts Payable is critical to ensure that authorized invoices are paid accurately, it is often not managed to world-class standards due to the time and expense required to implement best practices.

Is your organization utilizing Accounts Payable best practice to stay in control?  If you can answer YES to the following questions, you are. 

We know how many invoices we receive on a monthly basis

We have defined and well-documented business rules for matching invoices to Purchase Orders and receipts and approval levels that are followed explicitly by managers and Accounts Payable staff

We catch all duplicate invoices and have very small tolerances for invoices that do not match the PO or receipt

We know the number and dollar value of outstanding invoices (liabilities) before they are approved or matched

We know how many of our invoices do not match the PO or receipt and why

We know which of our managers have invoices in their inboxes waiting for approval and their dollar value

We receive invoices centrally and route those invoices to the managers that know whether the invoice is accurate, no matter where the manager is physically located

We have images of all invoices and can look them up on the web quickly and easily, eliminating time spent filing and retrieving invoices

We let our vendors look up invoice information and payment status on the web to reduce the volume of phone calls to our staff

If you answered no to any of the above questions, you should consider Aria’s Accounts Payable Outsourcing Services.  Aria’s Accounts Payable Outsourcing Services provide the following benefits:  

25% to 50% annual A/P processing cost savings without capital investment

Greater, centralized control over payables across the enterprise, irrespective of physical location 

World-class quality and accuracy, ensuring accurate matching to Purchase Orders and receipts and elimination of duplicate and erroneous payments

Real-time tracking and reporting of all payables from the time they are received from the vendor through disbursement, for client employees and their vendors

Reporting of A/P matching exceptions by vendor and exception type for improved procurement and vendor relations

Automated routing of payables for approval by business unit managers irrespective of location, enhancing control and manager productivity

Elimination of the headache of recruiting, hiring and managing clerical staff

The ability to focus on strategic, pertinent finance issues instead of non-value added activities such as A/P