10 tips for successful outsourcing

Outsourcing CAD and engineering services sounds like too much of a hassle, there are the technical aspects, specifications plus normal concerns related to using outside help for certain functions of the company.

However, the fundamental points of what’s important in outsourcing are the same no matter the area and industry. Making outsourcing work isn’t rocket science. Here are my top 10 tips for successful outsourcing.

Construction scene

#1. Know your reason to outsource.

Knowing and remember whether if you outsource to save money, to focus on core competence, to balance out seasonal highs and lows? Remember your reason as this will help you later answer questions like "How much can I pay for it?" and "Is outsourcing solving my problem?"

#2. Find a trusted company.

Ask around, your partners and others in the industry can give great references. Check the background of potential outsourcing partners, look for testimonials and critisism from customers, check the quality of their website, examples of clients, case studies and finished projects. Get in touch and ask specific questions about your field and type of work.

Bonus points:

* Find a partner who’s big enough to deliver without a hickup once you send them several large projects simultaneously.
* Check that your intellectual property is protected - employees and sub-contractors under industry standard non-disclosure agreements.

#3. Do a test first.

Take a page from the modern agile movement book and start small. Find a small and clearly defined project you can use as a pilot. With relatively small investment of time and money you’ll be able to evaluate the suitability of the chosen partner, the quality, you’ll unearth issues in the initial briefing, communication, tools and people. At the end of the test you’re in a position to decide if the kinks can be ironed out or if you’ll need to look for an alternative partner or attack the original problem (remember #1) from a different angle.

#4. Give enough information with your project.

It sounds obvious but it’s stressing as this is the singlemost important factor to success. Without a detailed description, background, requirements and constraints the contractor will not be able to produce the best possible work. Yes, it’s a big ask in the beginning but it will pay off very quickly.

#5. Clear process and stages.

Demand a clear process with milestones and deadlines. Online project management and collaboration tool (as opposed to email) can be invaluable as it keeps all details of the order, the exchange of questions, updates, change requests and finished project files in one place.

Bonus point: Ask how your partner has set up the quality control.

#6. Be responsive.

Your partner will have questions (especially in the beginning) about technical details etc and answering in a timely manner ensures both the quality and speed of delivery. This overhead for communication should be added to the project timeline anyway.

It sounds as a chore but in the end it is the key to making a project work. The positive aspect - the more projects you do with your partner the fewer the questions as they will get to know the specifics of your business.

#7. Grow step-by-step.

Remember #3? Scale up step-by-step adding to the project size and complexity. This gives time for both sides to adjust, take care of problems as they arise and builds a strong foundation to a long relationship.

#8. Prompt payment after delivery.

Once the work has been delivered on time and with good quality then don’t delay with the payment. Remember, it’s a partnership and honoring agreements related to the payment is a good way to getting to the top of your partner’s favorite client list.

#9. Measure and evaluate.

Circling back to my point #1 - did you achieve your goal? If yes, great! If not, then why not? Were the expectations unrealistic? What aspects need to be improved? Are some of the problems fundamental enough to think about terminating the co-operation? When evaluating the results take into account the amount paid, time spent by you / your employees, money saved on not having to purchase software and pay for training etc.

#10. Give feedback, get feedback.

Partnering with someone is like having an extra employee - they only improve when they get feedback on what’s working well and what isn’t. If they’re good they’ll ask for it themselves.

Get feedback from others in your company involved in the project - how did it work in their opinion, what needs to be improved. But also get feedback from the partner to see if the next project can go even smoother.

That’s my list based on over 10 years of experience talking to customers and now supporting them at GrabCAD to find a solution to their CAD services needs. Do you have any good tips to add to this list?

Photo: Dirk Schaefer

Follow Lauri on Google+