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1 March 2002

Outsourcing do's, don'ts, and inhibitors

Michael F. Corbett, CEO of a major outsourcing consulting firm bearing his own name and conference chair of last month's 2002 Outsourcing World Summit, has listed what he calls the "Five do's" and "Six worst mistakes" for small-business outsourcing. His advice could also be helpful to manufacturers.

Five do's of successful small business outsourcing

1. Outsource the bottlenecks-those things that are really keeping you from growing your business profitably.
2. Pick great partners. Check them out. Talk to their current customers.
3. Once you outsource, your provider is part of your company; treat it that way.
4. Demand excellence-this is what your provider does for a living. The way it does it should constantly amaze you.
5. Outsourcing can scare employees. Get, and stay, ahead of the rumor mill through straightforward, honest communications.

Six worst mistakes in small business outsourcing

1. Not clearly defining the desired results and how they'll be measured.
2. Not talking to a provider's current and former clients.
3. Failing to consider the long-term relationship dynamics.
4. Signing a standardized, multiyear contract.
5. Not planning up front for how the relationship might end.
6. Treating the provider as an outsider.

Top inhibitors to small business outsourcing

• Fear of loss of control
• Work viewed as too strategic
• Company's unique culture
• Measuring the value