There are always two options for digital marketing agencies: Set up your in-house operations or outsource your projects. Outsourcing is considered an intelligent business strategy these days. It is practiced worldwide where businesses delegate their tasks and projects to someone else for a price that is agreed upon in the contract.
It can be highly advantageous for both startups and well-established companies alike if used strategically. So it’s essential to have a plan before you outsource. It allows you to focus on your core competence and helps you reduce costs. It can be a lifesaver for growing businesses struggling with their day-to-day challenges. In addition to that, it allows you to maintain operational control at the same time.
However, the common challenges include handling it properly and choosing the right outsourcing partner for your agency.
Here you will find 13 no-nonsense tips to choose the right outsourcing partner for your agency:
Outsourcing from a novice and lesser-known company can be the biggest mistake of your life. Royal Bank of Scotland wanted to upgrade its banking system in 2012. So, it signed a contract with a lesser-known IT vendor.
However, it proved to be a significant mistake on the part of the Royal Bank of Scotland. The glitches in the software left millions of customers disgruntled as they could not access their accounts, check balances or perform even basic banking transactions. The glitch was so severe that millions of accounts lost visibility.
As a result, many customers lost faith in the bank’s ability to manage their accounts and moved to other banks. It is a lesson that the Royal Bank of Scotland will never forget.
You can check customer reviews on the following review sites:
Key Takeaway: Outsourcing has become inevitable in modern times, but it also has downsides if not handled carefully. It might ruin your branding and adversely affect your reputation and customer loyalty if your outsourcing partner cannot manage critical functions and eventually commits a grave error.
Failure to understand the project in its entirety can be disastrous for your business. A similar payroll system outsourcing disaster happened in Queensland Health Department in Australia in 2010. The contract was awarded to IBM in 2007, and they made the same mistake when they miserably failed to estimate the long-term cost of the project.
We know that very few people can doubt the capabilities of IBM. Yet, it became the most spectacular technology failure on the planet. As estimated by IBM, the project’s initial cost was AU$6 million, but soon it realized that it was far more extensive and challenging than they had initially imagined.
They announced in the middle of 2008 that the project cost was more than AU$27 million. So after several years of struggle and no success, the Queensland Health Department finally asked IBM to take its finger out. But by then, the project cost was already touching 16000% more than the original estimate.
When the application was being implemented, it led to over 35,000 payroll mistakes in the aging system. As a result, most of its 85,000 employees and healthcare professionals were either incorrectly paid or not paid at all. In addition, the minister of health had to resign because the facility was a public sector undertaking.
Even after spending AU$1.2 billion, the software application was not working correctly. IBM failed to understand the scale of the project and proposed a cost that was too good to be true, but IBM was awarded the contract because of its global reputation. Later on, it dawned upon them that they had committed a historical blunder, and the project cost was beyond their wildest imagination.
Key Takeaway: The job of project estimation should be given to experts familiar with the destination country, the nature and size of the project, and the complications involved. Your outsourcing partner must understand the intricacies and challenges of the project, and if they don’t, you should convey it to them. It’s better to include surprise elements, if any. Please don’t fall for the lowest quote. It may lead to disaster.
Apart from the Queensland debacle, IBM faced another fiasco in 2004 when JP Morgan fired them from one of their megaprojects worth $5 billion. It was a seven-year IT contract when JP Morgan suddenly changed their mind, fired IBM, and employed its own in-house IT team. But this time, it was not IBM’s mistake.
It was the wrong decision of the bank and their failure to assess their core competence that led to the disaster. It caused millions of dollars to the bank with abysmal results when they reemployed their in-house team. Choosing the right outsourcing partner is crucial to your success, especially if you don’t have the core competence in a particular field.
For example, many agencies in the US have core competence in SEO or web designing, so when their clients ask them to run Google or Facebook ads for them, they approach a professional white-label agency like DashClicks and outsource these services. It saves them a lot of time, hassle, and money.
DashClicks has large teams dedicated to providing best-in-class digital marketing services such as White Label SEO, White Label PPC, White Label Facebook Ads, White Label Social Media Posting, White Label Content Marketing, and White Label Web Designing.
Key Takeaway: If somebody tells you that outsourcing is terrible and you should try to do everything in-house, it’s best to ignore their rants. The fact is: outsourcing exists for a reason, and people go for it as it helps them achieve their business goals and scale their operations, especially when they can’t afford to hire expensive in-house employees.
Hiring the wrong outsourcing partner can be pretty expensive for you. Here is a firsthand account shared by Jonathan Long, a business consultant. One of his clients outsourced SEO Services from an overseas company that agreed to sign the contract for less than $500 per month.
When they started running the campaign, they circulated a press release. Unfortunately, its outsourcing partner mentioned in the press release that the products caused health issues. Obviously, they didn’t mean to say that, but the communication issues led to misunderstanding and seriously damaged the brand.
Key Takeaway: Ensure that the SEO reseller or the white label services you hire are competent enough. To minimize communication errors, they should preferably be native English speakers or non-natives with proficiency in the English language.
Richard Branson’s Virgin Atlantic outsourced check-in and boarding software and airline booking services to Navitaire, a software development company. Software failure is the last thing airline passengers can anticipate, but it happened twice in three months, and every time, it took more than 24 hours to get back on track. As a result, many flights were canceled, and thousands of customers were thrown into panic.
Key Takeaway: The ultimate test of your outsourcing partner’s proficiency is how quickly they can fix things if an emergency strikes and shuts down operations wholly or partially.
HR is a critical function in small and medium-sized companies, but they outsource it to cut costs and save time. However, its execution is much more complicated.
When a third party is assigned to recruit and manage people, there can be a massive discrepancy regarding the new hires’ skill-sets, attitude, and work culture. It can be detrimental to your organization’s interests and prospects.
Key Takeaway: When you decide to outsource HR functions, have face-to-face conversations with your outsourcing partner and communicate with them your exact requirements along with your Agency’s vision and work culture.
It would be best if you had a clear and well-documented scope of work before you even think of approaching an outsourcing partner. It’s imperative to have a clear vision of your business goals. You must also have a crystal clear understanding of your needs and how you can meet them to achieve the desired results.
Sometimes agencies are not able to clearly define their scope of work because of the technicalities involved. In that case, you can jot down a few questions and start answering them:
Brainstorming these questions may help you crack the code of writing a clear scope of work given the issues faced by your organization. When you can identify the core problems, you can prepare a blueprint to solve each one of them with a minimum spend.
Outsourcing shouldn’t be considered a plug-and-play type of arrangement where you can automatically anticipate the desired outcomes. The only person who knows everything about your business is you. It takes time for the 3rd person to understand your business and breed familiarity, which breaks down barriers and ensures the desired results.
Key Takeaway: Vague requirements don’t work with outsourcing partners, so for the best results, try to be as specific as you can when it comes to sharing your scope of work.
The cost of the project is the most ignored but highly crucial part of your outsourcing contract. It impacts everything from your relationship with the vendor to the quality of services. Both these factors are critical to the success of your overall project. Don’t expect to receive superior services at highly discounted prices.
So before you discuss the precise scope of work, you should also figure out the exact amount you will invest in the project and communicate it very clearly to your outsourcing partner. If possible, make sure that it gets mentioned in the contract. Many a time, it happens that the outsourcing agencies or businesses agree to a budget in a rushed meeting, and soon, the costs start snowballing quickly due to incorrect estimates.
Key Takeaway: Don’t rush when it comes to preparing and communicating the budget. You should do it very carefully and every minute detail should be taken into consideration to avoid surprises later on.
In the digital age, data security and privacy are among the two most prominent business concerns. Handling sensitive information of your customers is crucial to the survival of your business as your customers have exhibited a lot of trust in your enterprise. When you outsource business processes, you also end up sharing sensitive customer data with your vendor. Therefore, it is imperative to manage data with a high degree of safety and security and sign a nondisclosure agreement with them.
Key Takeaway: Outsource with a vendor who has the best systems, tools, and practices in place to ensure data security and intellectual property rights. They should also have a proven track record in it. If possible, hire a local service provider who can regularly conduct network and security audits at the premises of your outsourcing partner to make sure that they are taking the required precautions to ensure the safety of your client’s sensitive data.
In this fast-paced business world, customer requirements and demands are changing rapidly. If you are not an agile business, you may soon lose your client base. New companies might take you over if you don’t use Agile methodologies to satisfy your customers’ specific and ever-changing requirements.
Key Takeaway: To use agile methodologies, your outsourcing vendor should have a high degree of collaboration among their teams. They should have people with leadership qualities and problem solvers to understand and respond to new requirements immediately.
Before you finalize your contract with your outsourcing partner, try to make sure they have the infrastructure and technologies required for your project. If they are located outside your country, make sure that you visit their premises in their home country.
Key Takeaway: Unscrupulous businesses worldwide offer the best prices to win outsourcing contracts, but either they don’t have sufficient infrastructure or depend on the infrastructure of others with no infrastructure of their own. The same goes for the technologies they use. So before you sign the contract, make sure they have the proper infrastructure to run your project.
Post-development support is crucial to the success of any project. There can be several things or issues after the project is completed where you might need the help of your outsourcing partner. Ensure that your outsourcing partner provides this, or else you would have to pay for it additionally and waste a lot of time and money.
Key Takeaway: To avoid hidden charges and unnecessary inconvenience related to the lack of post-development support, make sure that you read lengthy contractual agreements along with all the fine prints.
Outsourcing is not a bad idea as long as you have a plan. It helps you scale when you don’t have sufficient infrastructure. It is also one of the most innovative strategies that a startup can implement. In the light of the above examples, you should have a proper plan before deciding to outsource so that you can avoid the apparent mistakes a startup can make.
In a rapidly changing business world, where business requirements change frequently, outsourcing can boost your efficiency and allow you to focus on your core competence without losing any of your clients, thereby propelling the growth of your agency.
There are lots of companies that have scaled through outsourcing in the previous two decades. It’s a long list that includes HP, Intuit, Microsoft, Apple, Citi, Procter & Gamble, Orange, Cisco Systems, Oracle, Nestle, Dell, GE, AT&T, Verizon, American Express (Amex), Facebook, Fidelity, and IBM to name a few. It is your turn now! Follow these tips and choose the right outsourcing partner for your agency’s growth.