Choosing the Right Outsourcing Partner

Best practices for choosing the right outsourcing partner

The following advice will help you find the right outsourcing partner and gain a competitive advantage.

1. Define a clear scope of work.

Before reaching out to potential outsourcing partners, write a clear scope-of-work document that aligns with your business goals. Understand and define the functions your business needs assistance with and how outsourcing can help you achieve desired outcomes.

Start by answering the following questions to identify the problem you want to solve and prepare a clear road map toward a solution:

• What is your precise need?
• What is the best possible solution for that?

Nicole Magelssen, CEO of Alpine Virtual, a virtual assistant company, emphasized the importance of assessing the tasks you’re considering outsourcing. “For our clients, we recommend spending time tracking what tasks they are doing and how much time it takes them,” Magelssen explained. “This will give them an idea of whether it makes sense to outsource that particular task, and if so, how many hours they will need on a weekly or monthly basis.”

Businesses often make the mistake of expecting the outsourced resource to innately understand the business and your goals. However, this expectation is unfair and sets up the relationship to fail. Outsourcing isn’t a plug-and-play proposition; it’s a tool to help you accomplish a specific goal. 

For the best chance of a successful relationship, be specific. For example, instead of asking them to “create a mobile app customers will love,” offer detailed requirements about mobile app features (e.g., push notifications, e-commerce support), user experience requirements, the platforms it must support, your target audience, and your overall goals.

2. Evaluate the expertise of potential outsourcing partners.

When evaluating an outsourcing partner, consider the following categories: 

• Technical expertise
• Skill sets
• Access to the latest technology
• Experience in solving complex challenges
• Passion for your project

Look to your specific needs when evaluating each category. For example, if you’re outsourcing customer service, you’d take a close look at the company’s business phone systems, communication capabilities, and call center technology. However, if you’re outsourcing mobile app creation, you’d examine an entirely different set of skills and tech capabilities, such as their experience with coding languages, app development platforms, and UX design. 

Tatsiana Kirimava, CEO and co-founder of Orangesoft, stressed that your needs and the outsourcing company’s expertise must align. “The best outsourcing partner is one that has hands-on experience in delivering solutions according to your project scope [even] if it evolves during your collaboration and can deliver [on] time, on budget, and without disrupting your core business processes,” Kirimava explained. Expertise, team size, cost and collaboration flexibility will all factor into your decision.  

3. Consider any potential outsourcing partner’s market reputation.

Quality, including product quality and customer service quality, is critical for all businesses. This necessity extends to any outsourcing partner you work with. Their performance and communication quality will directly impact your business’s reputation. 

To work with a respected outsourcing resource, thoroughly check all professional job references and research online reviews to learn about their history and reputation. B2B rating and review sites like Clutch and GoodFirms are a great way to learn about and connect with reputable outsourcing partners in various fields. 

4. Communicate clearly about your budget.

Budget planning is crucial when hiring an outsourced firm or professional. Determine how much you’re willing to invest and communicate clearly about your budget with the provider you select.

Remember that highly skilled resources can be costly, so determine if the investment is worth it. However, if you expect superior services from an outsourcing partner, you must also understand those services often cost more than the average.

Finalize your budget before approaching an outsourcing partner, but remain open to discussing cost adjustments based on their expertise or the additional value they can bring to your project. Transparent communication will help set mutual expectations and prevent misunderstandings later.

5. Protect your data and intellectual property.

When working with an outsourcing firm, you may need to share or provide access to confidential data or proprietary intellectual property. If this information is not managed correctly, your business could be at risk of a data breach or intellectual property theft.

Protect your business by requiring your outsourcing partner to sign a non-disclosure agreement (NDA). Additionally, ensure any business or professional you work with has robust network and security protocols in place to protect your business from cybercrime. 

6. Use Agile methodologies in your development process.

The only way to survive in today’s market is by accommodating customers’ ever-changing requirements. To meet these evolving needs, you have to use Agile methodologies.

Agile methodologies create a highly collaborative environment that delivers quick results. If you want to be a leader in your industry, you should hire a vendor who implements Agile methodologies so they can effectively adapt to your customers’ changing requirements.

7. Choose a flexible domestic or international partner.

Your selected outsourcing vendor must be flexible enough to handle urgent issues promptly or pivot a project to accommodate changing needs. 

Flexibility is especially important when working with an international partner or one far enough away to be in a different time zone. For example, if you outsource customer service to an overseas partner, they must ensure availability to accept calls and handle tickets when your customers need help. They must also be able to communicate with you regularly.  

Time flexibility shouldn’t be an issue for a high-quality outsourcing vendor. “Time zones and cultural differences can be hurdles but not deal-breakers,” explained Steven Khanna, head of growth at Endorsely. “Set clear communication rules, use tools like Slack or Teams, and plan some overlap hours. Think of it like scheduling a call with a friend abroad — manageable with the right planning.”

An international or domestic outsourcing firm may be the right partner for you, but it all comes down to whether the provider can meet your needs at a price you can afford. “Choosing between international and domestic partners comes down to priorities,” Khanna noted. “International teams can save costs but may require more effort in syncing schedules and bridging cultural gaps. Domestic partners simplify communication but may stretch your budget.”

The benefits of outsourcing

Outsourcing is popular for several reasons. Consider the following benefits of an excellent outsourcing relationship. 

Outsourcing can save money. 

According to Wipfli’s 2024 Outsourcing Trends Report, 76 percent of business leaders outsource to cut business costs. Outsourcing firms, particularly those in specialties like human resources, customer service or IT, often achieve economies of scale and operational efficiencies. This allows them to offer high-quality services at a lower price. They can then pass significant cost savings to their clients.

If you choose an international outsourcing company, you may find highly competitive pricing due to differing economic conditions. However, outsourcing’s true value lies in the overall efficiency, expertise and quality these firms provide — often at a lower cost than handling these services in-house.

Outsourcing provides access to specialized expertise and talent.

According to the Wipfli report referenced above, 92 percent of business leaders cite access to specialized expertise as a key motivator for outsourcing. Additionally, 84 percent prioritized access to high-level technology and tools. Outsourcing vendors bring highly specialized knowledge, experience, and advanced tools to the table. These resources would likely be prohibitively expensive to replicate in-house.

For example:

• If you hire a call center, it will likely be equipped with one of the best business phone systems, facilitating seamless communication with your customers.
• An outsourced IT firm brings in-depth cybersecurity expertise and access to tools that protect your business from evolving threats.
• An HR outsourcing provider can expertly navigate complex HR compliance challenges, keeping your business in line with regulations.

Duplicating these types of specialized resources and expertise internally would be difficult and cost-prohibitive for most businesses. However, outsourcing gives you access to these invaluable capabilities without the significant investment of building them in-house.

Outsourcing provides flexibility and scalability.

If your company needs project-based or temporary work, hiring a full-time in-house employee often doesn’t make financial sense. This is why businesses frequently outsource tasks like website and app development, which require short-term expertise without long-term commitments.

Outsourcing also allows rapidly growing companies to leverage external expertise to scale their operations quickly. If a big push is needed for a limited time, such as for a product launch, a flexible outsourcing partner can ramp down efficiently when needed.

Outsourcing allows you to focus on your core competencies.

Eighty-six percent of respondents in the Wipfli report cited the ability to focus on core functions as a significant reason for outsourcing. For example, an entrepreneur may excel at developing innovative ideas and driving business growth but lack expertise or interest in accounting, IT or marketing. Outsourcing these tasks allows businesses to concentrate on what they do best while keeping critical functions in expert hands. Ultimately, this improves efficiency and productivity.

Outsourcing gives you a competitive advantage.

Outsourcing brings businesses agility, specialized expertise and cost savings — all of which can give them a competitive edge and help them stand out from the competition. Your outsourcing partner can help improve your product and service quality, allow you to take advantage of market changes quickly, and pass savings along to your customers in the form of lower prices. The ideal outsourcing partner will truly see itself as a partner, not a vendor, and will make suggestions proactively to help your company become even more competitive.

Jennifer Dublino contributed to this article.