7 tips to cut down outsourcing consultancy cost

As global BPO market expanding to new heights; it is an undisputable fact that the rate of outsourcing consultancy services will also shoot up. If outsourcing buyers are not careful, then cost of third party assistance to carry out business process will run out of control from their hands.

7 tips to control outsourcing costs

While companies enter into new outsourcing engagements, there are ways to put cap on the rising outsourcing costs.  Here are seven tips to put a cap on the outsourcing service providers from raising their prices.

  1. Set expected timing of the contracts clearly: The customer and consultants should clearly set the expected timing of the contract to be completed prior the process of outsourcing begins. Companies can set a time frame of one month for a simple outsourcing contract, two-three months for mid-sized companies, four to nine months and sometimes more for contracts with value more than $500 million.
  2. Reduce the number of consultants involved in outsourcing contracts:
    Usually in an outsourcing contract, there involves two to seven full time professionals. However, in reality, only one or two of them are real professionals and the work done by others can be done by anyone. The companies can consider taking the other’s work in-house and reduce the number of people in the consulting team.
  3. Keep the control: Companies can hire an expert from the company to select the process to outsource and hire an expert in the area of the outsourced process as project manager internally. Thus companies can have full control over the outsourced process and let the service provider deal only with performing the process.
  4. Put a curb on presentations by the consultants: Many companies while they outsource insist their partners to make presentations of the progress after every single layer. But the fact is these presentations kill the consultant’s time. So reduce the presentation frequency in the outsourcing project.
  5. Consider hiring experts: Even while outsourcing major process; it is advisable to hire services experts in-house. This can be an extra cost initially but over a period of time, it will pay off well.
  6. Be choosy: Outsourcing consultants prompt the managers to outsource the entire process by saying that they can only perform well when they are engaged in the entire process. But companies are required to be choosy and pick only the process they feel that it should be outsourced.
  7. First try to do in-house and then later consult: Companies can consider buying the service from outsourcing partner after trying to perform the process in-house first. In that course, companies can get an idea of how much to outsource and then fix up appointment with outsourcing partner to negotiate deal and pricing terms.



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