How do I Choose the Best Outsourcing Vendors?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 07 November 2019
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Today, small and large businesses sometimes utilize outsourcing vendors in order to manage the company in a manner that is more efficient as well as cost-effective. There are a number of functions that can be outsourced successfully, including payroll, general accounting, technology services, and even public relations. Finding the right vendors is important to making sure these important functions are conducted in a manner that will benefit your company, rather than create more problems than they solve.

Your first task in locating the right outsourcing vendors is to ask yourself a few basic questions. First, why outsource in the first place? Often, the reason is because you have limited resources for the business, and need to keep expenses as low as possible. The cost of using vendors for some of your needs is usually much lower than the salaries and benefits you would pay in order to have full-time staff handle those same functions.


Next, make a list of what you need accomplished. For example, if you want to look at outsourcing vendors to handle your payroll, define what you will need done as part of that project. Are all your employees paid weekly, biweekly, or monthly? Do you have hourly as well as salaried employees? Do you want the service to handle all the withholding and reporting to the proper tax agency? Knowing what you want the vendor to do will make it much easier to identify potential vendor partners that can manage all the tasks without any particular trouble.

Once you know why you want to outsource and what you need done as part of the outsourcing project, you are ready to evaluate specific vendors. This often begins by asking for quotes or proposals for their services. Keep in mind you can submit a specific Request for Proposal, or RFP, to each potential partner. Include a specific format for the response. Doing so will make the process of comparing the merits and pricing of each potential vendor much easier.

Along with obtaining information on pricing and support services, you may also want to obtain references for each of the outsourcing vendors you consider. While a program may look very good on paper, you want to be sure that a given vendor does actually follow through with those promises. Talk with others who’ve used the vendor and ask if their personnel are always professional, if they accomplish tasks in a timely manner, and how effectively they deal with any type of emergency situation that arises.

Only after you have evaluated each of the outsourcing vendors on your list, and chosen the vendor who meets your needs should you consider signing an agreement. Read all the terms and conditions before signing anything. Ask questions if there is a clause or section that you don’t understand. Once you are sure everything is in order, make the commitment and rest easy that the tasks you have assigned to the vendor are being handled with care and efficiency.


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