Top 10 Outsourcing Tips for Uncertain Economic Times
动荡经济时代服务外包的10个秘诀

We made the move to outsource our technology service and support to save money, right? And we did save money! But that does not mean that during uncertain economic times that we can’t go back and find additional cost savings with our outsourcing model. If we dig deep enough and look hard enough the cost savings are there. Here is a list of the Top 10 things we can do to drive more cost out of our business.

1. REVIEW AND REVISE EXISTING CONTRACTS
As much as we hate the thought of going back to all of those outsourcing agreements that took us several months to put together, now is the time to fully understand what we signed up for and assess the value of each bullet item. For example, look closely at the expense-sharing components of the contract. Who is paying the lion’s share of the major expenses? Can we renegotiate these shared expenses to offset our cost and continue to do business with this outsourcer?

2. EVALUATE THE TOTAL COST OF THE OUTSOURCING CONTRACT
When we initially put our outsourcing agreements together we had to make a strategic decision to either pay per call or per minute. On one side we could be paying the outsourcer for each phone call or incident that they handle and on the other side we could be paying a flat rate based on minutes on the phone. Which model is better? Which one is more cost effective? Now is the time to evaluate and change the agreement, if necessary, so that we are getting the best possible deal for our outsourcing dollar.

3. LOOK AROUND THE WORLD FOR BETTER OUTSOURCING AREAS
We made our decision to locate with outsourcing partners based on the countries and their low cost labor market. A lot has changes in the past three years and we are seeing additional locations popping up that seem to be the new low-cost-leader in technology services outsourcing. Now is the time to scan the globe and determine if yesterday’s decisions still provide all of the cost savings that we need today. Changing outsourcing locations is no fun but it could be a wise financial decision.

4. GET YOUR EGGS OUT OF JUST ONE BASKET
Another cost cutting measure is to start to distribute your outsourcing work to several different geographic locations. Hedge the bet against rising costs in one location by sourcing alternatives and start small operations to test the waters. Remember that we are searching for any and all ways that we can reduce our outsourcing expense and that might mean moving our business to several locations around the world.

5. SEND IN THE BULL DOGS
We have learned some valuable lessons from our own customers as they continually pressure us to reduce our maintenance fees that they pay for upgrades, fixes, and tech support. Some of these customers can be ruthless in their negotiating skills and will not be happy until the expense to them goes down. We can use the same techniques to get our outsourcers to reduce their fees. This is not a pleasant exercise so get your meanest procurement “bull dog” to lead the charge and push hard to find ways to decrease the overall expense for each outsourcer you do business with.

6. REDUCE COMMUNICATIONS COSTS ONE CALL AT A TIME
It is essential to communicate with your outsourcers but do we really need to spend this much on phone calls, Internet access and shipping? Are there any pennies to pinch in the methods we use today to communicate half way around the world? A complete audit of the cost of communicating with your outsourcers needs to be scheduled and the outcome should identify cost leakage and develop corrective actions.

7. KEEP SQUEEZING THAT TRAVEL BUDGET
In poor economic times, the first things that CFOs attack are travel related expenses. It is essential that we reduce the total number of face-to-face meetings because they are just plain expensive. Airfare, lodging and food are budget killers so cuts here will be seen in the bottom line. This is not all bad because all of those trips to all those countries have been wearing on your staff and taking a break can be a true relief.

8. TAKE A LOOK CLOSE TO HOME
Even though we have established outsourcing presence in the cheapest labor markets we can see that there are still a lot of hidden costs associates with doing business with any company far, far away. An alternative is to take another look at near-shore options. The labor costs may be higher than other locations but the overall cost to outsource may end up being less. At this time, it is worth a second look at those outsourcers located either onshore or in near-shore locations.

9. SHARING TECHNOLOGY CAN BE CHEAPER THAN PAYING FOR IT
An IT evaluation needs to be completed to see if there are any ways that the technology solutions that you are paying for now can be changed to more of a shared approach. For example, if you are paying a fee for the outsourcer to use their CRM tool to log and track your customer issues, can you simply provide access for the outsourcer to your own CRM system in place of this expense. Typically, additional seats on your CRM are less expensive than technology usage fees offered by the outsourcer.

10. HELP YOUR OUTSOURCER STOP THE BLEEDING
Most outsourcers are having difficulty retaining quality people. In fact, employee turnover in some countries is three times what we see here in the States. Turnover means more cost and that expense is typically seen by rising rates for outsourcing services. We know a lot about retaining tech support people and have lived through years of 35% turnover rates and the revolving door of people coming in and then leaving the support center. One way to ensure that your outsourcing rates do not increase is to lend a helping hand to your service partners. This can be done by coaching and educating outsourcers on employee wants and needs and can result in a slowing of the flow of talent out their doors. Share what you know about the people side of technology services and help your outsourcers keep more trained people in place.

So, here are ten things that you can do to reduce outsourcing expense in a downturn economy. Not all of these will work for you but each one is worth the effort. Remember that our objective here is to find additional pennies to save and we must look at every possible option including our outsourcing partners.