Business process outsourcing becomes useful when you need to ably manage diverse processes. Ensure that you research your outsourcing partner carefully.

1. Why a thorough Research of
Your Partner Is Vital when
Outsourcing
Business process outsourcing becomes useful
when you need to ably manage diverse
processes. Ensure that you research your
outsourcing partner carefully.
Managed Outsource Solutions
8596 E. 101st Street, Suite H
Tulsa, OK 74133

2. www.managedoutsource.com (800) 670 2809
Businesses organizations have various activities such as production, marketing, finance,
human resource management, data entry, innovation etc. As the business expands,
business leaders find it difficult to manage all these activities systematically. This is
when business process outsourcing becomes useful. Outsourcing refers to the
strategic use of outside resources to perform activities traditionally handled by internal
staff and resources. It is strategy by which an organization contracts out major functions
to specialized and efficient service providers who ultimately become valued business
partners. Outsourcing helps business managers focus more on the core activities of the
business.
The Risks of Not Researching Your Business Partner
Even though outsourcing has a number of advantages, it is essential to perform a
thorough research before you sign the contract with an outsourcing company. The Boca
Raton Tribune carried an article by Robert Curry, an Author, Business Coach, Keynote
Speaker, and Turnaround Specialist that clearly highlighted the need for a thorough
background check of the agencies/personnel you partner with.
A doctor who had sold his medical practice had a team of computer programmers to
write new medical billing software. The software development project took one year and
the beta test was very successful. It was much easier to enter the invoices. Payments
were made by the insurers 25% faster, and the software turned out to be a great
product.
However, the doctor was unsuccessful when he tried to license the software to other
medical practices.
• This was mainly due to the fact that the doctors he approached were hesitant to
change their existing billing systems that represented 95% of their cash flow.
• If there were any hitches with the new software, it could prove detrimental to
their practices.
• Though the new billing system was more efficient and collected money faster, it
would not sell.
The doctor never expected this problem and was quite frustrated. His new plan to
accommodate this challenge was to purchase a couple of third-party medical billing
practices. He would install his software to prove the efficiency of this product further and
then take the company public. Once the company was public, he would have enough
money to market and sell the product to many customers. Unfortunately, he did not
have enough money to purchase the third party medical billing companies.

3. www.managedoutsource.com (800) 670 2809
The doctor then contacted Robert Curry and said he wanted to borrow $15 million from a
private equity firm or investment bank to purchase a medical billing company. Curry,
who was dedicated to taking businesses from losses to profits, thought this was a great
opportunity for him to help the doctor raise the money he wanted. He would help with
the acquisition transactions of the medical billing companies and then integrate the
business profitably. Curry then got in touch with a person with fundraising experience,
talked to him and was confident to partner with him on this project to raise money. They
also arrived at a fee-sharing agreement for the fund raise. Then they had a conference
call with Curry’s doctor client. Curry developed a contract for the fund raise as well as a
fee split agreement between himself and the fundraiser. He also wrote an agreement for
the doctor for the raise and sent the same to him immediately.
He did not receive any response from the doctor client for 3 days. After that, following
many attempts to email and voicemail the client, Curry finally received a one-line email
from the doctor asking him to Google his partner. On googling, Curry found that the
fundraising person he partnered with was a fraud and had spent 9 years in jail for 25
counts of fraud. The failure to conduct a background check on his partner cost Curry
$500,000 and embarrassment with the doctor client. Curry would have got a fee of
$375,000 for the raise and $15,000 for drafting the Private Placement Agreement. In
addition, he would have earned $100,000 in consulting fees for the medical billing
companies’ acquisition by his firm. Curry understood he should have done a background
check on his partner before letting him interface with the doctor client.
Major Considerations When Outsourcing
From the above-mentioned experience, we learn that not doing proper research about a
company before signing the partnership can sabotage your firm. Another very important
thing is to draft an agreement called outsourcing contract for both the service provider
and your company. This contract protects both business owners and the partnering
providers from all unfavorable situations that can arise during a partnership. At the
same time, it serves as an official document that details what both parties should expect
from a deal. Drafting a contract can be difficult and it should be done carefully. It must
cover all aspects of the business partnership and anticipate future situations. Companies
should conduct meetings, several consultations and solid research before drafting the
contract.
Following are the major considerations when choosing a service provider.
• Ensure good communication: Proper communication with the service provider
is essential because it can either make or break your business. Find out whether

4. www.managedoutsource.com (800) 670 2809
your company and the service provider speak a common language, are they
available on same communication channels like email, VOIP (Skype) etc. If the
service provider does not understand what he is doing, then he may not be able
to fulfill his duties successfully. Maintain a strong relationship with the service
provider for better service and also monitor their work at regular intervals to
minimize any errors.
• Look for references and, experience work samples: To start with, find out
how many years of experience the service provider has and then ask for client
references and work samples. This will help you understand their quality of work,
delivery timings, customer support, customer management etc. Make sure to look
for potential challenges and how to avoid them. Also, find out about the service
provider’s experience, number of projects executed, types of clients they worked
for, their expertise regarding knowledge-intensive tasks etc. If you are planning
for a long-term relationship, then it is important to interact with them first before
outsourcing.
• Check IT infrastructure: This is very important for large companies that use
the best IT infrastructure and data security to ensure that all data are shared in a
confidential manner. Look for Business Continuity Plans (BCP) to ensure
uninterrupted support or services.
• Check for financial stability and work culture of the provider: Make sure
that the service provider is financially secure. Find out more about the
outsourcing service provider’s directors and managers, their experience and
qualifications. This will help you analyze the outsourcing provider. Similarly,
understand their work culture because working with a company whose goals and
culture blend well with yours is the best foundation for building a strong business
partnership.
• Have realistic expectations: Outsourcing is always seen as a remedy for
handling various activities of a business organization at low cost with increased
profitability. This can lead to overestimation of benefits that come with
outsourcing. Instead of maintaining high expectations regarding the service
provider, request for a trial project so that you will know what to expect from
them.
Choosing a good provider of outsourced solutions will help a business grow, improve
productivity, efficiency and ensure optimal utilization of resources. You may be looking
for solutions such as medical data entry or survey data entry or some other service
– whatever service you need, the choice of service provider must be made with the
greatest discretion.