In business circles, stories about outsourcing usually go one of two ways: It’s either the lifeline that saved CEOs from bankruptcy or the blunder that damaged a company’s pipeline, profits, and reputation.
Regardless of what you’ve heard, switching to outsourcing is not as simple as picking a name out of a hat, especially when you’re leading a business.
Choosing the right partner for outsourcing takes time, patience, and a keen eye for quality.
In this blog, we’ll walk you through how to select an outsourcing partner that aligns with your business needs and values. From assessing expertise and experience to gauging communication and cultural fit, we’ve got tips to help you make the right decision.
Which Potential Outsourcing Partners to Choose From
If you’re new to the game, you can start off your outsourcing journey by cutting through the noise and narrowing down your prospective partner firms.
For firm owners looking to rediscover the transformative power of outsourcing, there’s something here for you, too.
Note: While we don’t want to impose, it helps to follow these steps in this particular order.
- 1. Make a checklist
This is something you shouldn’t skip doing.
Any outsourcing company can market itself in a shiny, flashy way, but as the quote goes, “All that glitters isn’t gold.”
This is why you need to list down the things you’re looking for in a partner firm, so that you stay organized, objective, and focused.
You’d want to remain systematic and methodical. Fairly compare different potential outsourcing partners’ offerings without getting swayed by too-good-to-be-true promises, and most especially, avoid overlooking pertinent, concrete criteria.
- 2. Apply the rule of cancelation
Ever heard of this principle? It doesn’t just apply to multiple choice tests.
Once you’ve created your checklist, navigate to your pool of options and start checking or crossing out your boxes.
At this point, you’ve probably canceled out the firms that don’t match most of the criteria you’ve established. That means you’re a step closer to making a solid, strategic decision on partnering with an outsourcing firm.
- 3. Look for social proof
Even if your prospective partner has all the impressive numbers and figures, don’t just take their word for it!
Social proof means real-life evidence that your prospect is walking their talk.
This includes reviews, case studies, client testimonials, awards and certifications, and endorsements from authoritative figures.
To gauge the legitimacy of their social proof, you can check the consistency of their claims throughout the platforms they use and the statements they put out.
This way, you can rule out firms with inconsistent or suspicious patterns. You can also peek at your potential partner firm’s social media metrics. Be wary of bots or any other questionable activities you observe.
- 4. Reach out to your prospect's business representative
You know what they say: “Don’t knock it ’til you try it!”
At this stage, it’s best to touch base with a legitimate business representative who can walk you through the whole process and answer your questions clearly.
Take note that this doesn’t mean that your current prospect is the one — reaching out to a representative is primarily done to gauge if your partner of choice chooses their people well.
There are red flags that signal you to take a step back and think harder and better about working with that partner firm. Some things you need to look out for:
- Ill-mannered business representatives
- Informal/vague answers
- Failure to disclose crucial business details
- Inconsistencies between written documents and verbal statements
What to Look for Among Potential Outsourcing Partners
As we’ve mentioned before, a personalized checklist for your potential partner firm saves you a lot of time and energy.
But don’t waste your bandwidth on Google searches for your outsourcing options checklist: We’ve rounded up four key factors for you right here.
Pro Tip: You can add or subtract items as you wish, as long as they help you identify the partner firms that meet your criteria and the ones that don’t.
- Mission and Vision
More than the services they provide, you should pay attention to the firm’s short and long-term goals.
Look into their company mission, vision, and values, which are typically published on their website or posted in-office
For further clarity, checking the feedback of their previous or current clients is crucial for transparency and credibility.
- Financial Status
Another determining factor that a partner practice can survive in the long run is its good financial standing.
If you want to accurately measure the value and performance of a potential partner, you can run an ABC test:
- Analysis: Review financial statements like their balance sheet, income statement, and cash flow statement, as well as some key financial ratios like their liquidity ratios, solvency ratios, and profitability ratios
- Benchmarking: Compare their financial status with other companies in the same industry
- Checking: Browse through their website (and other relevant databases) for their SEC filings and other financial reports
- Cultural Compatibility
You and your partner firm should see eye to eye, with mutual efforts to understand each other.
The first step is to acknowledge your cultural differences. When you recognize these differences, you can manage them sensitively.
Exerting considerable effort to learn about each other’s cultures eases communication, fosters mutual trust, and helps you iron out potential conflicts faster.
This can even enrich the current company culture, with bits and pieces taken from the cultures of the host country and its branches.
- Technology and Infrastructure
Outsourcing doesn’t just accommodate how the industry evolves — after all, it’s an innovation in and of itself.
From AI to cloud computing, make sure your outsourcing partner is fully equipped to execute your tasks and projects successfully.
A well-planned tech infrastructure gives your firm an impactful domino effect: You and your partner firm both benefit from the seamless integration and interoperability of your programs and systems, the enhanced UI/UX, automation, and boosted communication, among a slew of other advantages.
Want a tech stack that fits your business like a glove? Save your time and read up on our comprehensive tech stack guide for accounting and beyond.
Where to Find the Right Outsourcing Partner
You can find good talent teams all over the world, but some destinations have outstanding track records that make them shine above the rest.
So, whether it’s for cost savings, a competitive advantage, or other specific needs for your business, the territories we will mention are the top picks for outsourcing partner companies.
- Offshore Countries
Don’t let the distance intimidate you!
You can still forge a successful partnership with an outsourcing company by leveraging the three Ts — time, technology, and trust. With that said, here are some of the best offshore destinations for outsourcing.
Philippines
Home to some of the world's most proficient non-native English speakers, the Philippines is a globally recognized and acclaimed territory for business process outsourcing.
Filipino talent also cuts across industries, like healthcare, IT, finance, and accounting, with companies based in countries like the US and Australia proven to benefit from outsourced Filipino staff.
Aside from cost-effectiveness, it's their work ethic and industry know-how that set them apart from other offshoring options.
India
Another titan in the offshoring landscape, India ranks high in English proficiency, industry expertise (especially in IT), and work ethic.
With the third largest higher education system in the world, India's massive pool of skilled professionals are great candidates for outsourcing partner firms.
Malaysia
This country is a melting pot of races, religions, cultures, and ethnicities — from Muslims, Buddhists, and Hindus to Malays, Chinese, and Indians.
Many firm owners outsource Malaysian staff due to their cultural diversity, enriching their firms’ current business insights with their unique lived experiences and perspectives.
Vietnam
Boasting a young and dynamic workforce, Vietnamese outsourced staff are well-trained and well-educated. Their government has also implemented policies in support of outsourcing industries, such as tax incentives and streamlined regulations.
With stable political support and robust infrastructure development, Vietnam provides a conducive environment for companies looking to outsource their operations.
- Nearshore Countries
Also looking into nearer territories?
Aside from significant savings and exceptional workforce skills, the main competitive edge of nearshore countries in general is the time zone similarity with the parent country. Here are some of the top destinations for nearshoring.
Mexico
Mexico has flexible laws for nearshoring, which makes it a perfect destination to find a potential partner firm. It's also home to a cost-competitive labor force and extensive logistics networks, all of which contribute to boosting the efficiency and cost-effectiveness of your operations.
Brazil
Boasting a booming IT workforce, Brazil has a developing tech sector that offers cost advantages to North American and European companies, mostly because of proximity.
South Africa
Aside from reducing costs and enhancing operations, South Africa can culturally align well with parent countries. Firms in South Africa also mostly have a multilingual workforce, boasting a high English proficiency rate.
Puerto Rico
Finally, we have Puerto Rico, with a flexible legal and regulatory framework, proximity to the US market, and a skilled workforce. It also has attractive tax incentives for foreign businesses.
The Best Outsourcing Partner for Accounting (and Beyond)
Whether you’ve partnered with global talent teams in the past or you’re yet to dive into the world of outsourcing, you can’t work with a partner that overpromises but underdelivers.
The right outsourcing partner should ease your firm’s burden, taking on mounting low-margin tasks that bog down your core team. A good outsourcing partner should accommodate your firm as it scales up or down while also bridging the worldwide skills gap.
We want your firm to thrive amidst the changing needs of your field, and we’d be more than happy to help you explore the world of outsourcing. Get started with us here.
