In module number two Derek will discuss the nitty-gritty of engaging with the right outsourcing service provider.
- One of the common questions that Derek gets a lot is “should you use a freelancer or a company structure?” This would depend on your company’s need. So, Derek’s advice is to start outsourcing now. Dip your toes a little bit to find out what will suit your company’s needs.
- It’s also important to know also the difference in structure between freelancers and agencies and full-service BPOs. Upwork is on one end of the spectrum, the other end of the spectrum is full-service BPO which is Business process outsourcing service provider.
- Four main models of outsourcing.
- Freelancers and contract workers on Upwork and freelancer.
- Seat leasing operation – finding an office space within the Philippines and they will rent you a seat and effectively then you can arrange the staffing and they are housed and they will provide some basic services for that.
- Staff leasing – the service provider will help manage your staff they will help recruit your staff and they will house them within a good safe office environment.
- Comprehensive outsourcing – this is where outsourcing started and this is business process outsourcing in its truest sense.
- Derek encourages the listeners to create an outsourcing requirement template. Ask yourself if you want a minimalist service oversight which is cheaper but would hassle you more. Or do you want an automated approach, more expensive but lesser supervision from you?
- Derek gave some examples of the contracts and service level agreements that you would find within outsource service providers.
- Then Derek discussed inquire, negotiate and hire. As Derek mentioned, there are very standard approaches to outsourcing now and it’s important that you know what you should be asking for within a contract.
- Then the last part of the module is the 50-Dollar Exercise. Derek encourages listeners to try outsourcing either in Upwork or Freelancer.
- Finding a suitable partner for your outsourcing future is critical. It can make or break your experience so you have to choose wisely.
- Make sure that you always have the right foundation because it could save you a lot of time in the future.
- Whenever you are negotiating a contract, always try to make it as flexible as it can be. So, if ever you’re planning to incorporate in the future, a contract from a BPO service provider will not hinder you from doing so.
- It is good to test outsourcing first before you decide to outsource several functions of your company. Which is why Derek is encouraging the listeners to start with the 50-dollar exercise.
Just a quick note I want to tell you the incredible value that the Outsource Activation Consultation Program has for you. Okay. So, there’s these upcoming episodes are about the six modules of the Outsource Activation Program within the podcast episodes. I give you an insight into the learnings that you would have on the Outsource Activation Consultation Program but there is so much more value if you actually do the full program. Now I’m not suggesting that you have to do this. I am sharing with you key points and value within this consultation regardless of whether you want to do the course or not. This is because I am so passionate about outsourcing and encourage everyone out there to try it. But if you do decide to take the activation consultation then there is so much more in there for you. Okay. There is over 1300-1400$ worth of actual course content for you. Okay. There are multiple charts and infographics. There’s 21 learning resources there is I think two to three dozen videos. And then there are expert videos. There are virtual BPO tours and then also there’s mastermind groups. And of course, there are one on one business consultations. There are open office sessions and we build for you a network in Manila of key people that you can turn to if you need contacts, leads if you need to start your outsourcing journey. Then you have them up your sleeve. So, there’s a huge amount of value there but more specifically it’s not just about the learning and education you get. You actually receive bespoke consultation and advice from myself and Outsource Accelerator. Okay, you get one on one consultation time and you get quick results and solutions for your business that you can if you feel the time is right immediately implement. So, I really believe that there are phenomenal results and potential for you and your company by doing this consultation. That is why I’m so excited. If you just want to listen to the podcast that is absolutely fantastic. That is fine because I’m just so enthusiastic about people starting their outsourcing journey. But if you do want to consider the outsource consultation then go to our website to find out more.
Hi and welcome to another episode of the Outsource Accelerator podcast. My name is Derek Gallimore and this is episode number 58. If as a reminder if you want any show notes if you want any of the resources mentioned here then just go to our website and the show notes are at outsourceaccelerator.com/58.
So today this is a continuation. This is part three of the Outsource Activation Consultation Program overview. OK. So, the Outsource Accelerator offers a consultation program where it basically takes you from little knowledge to a level of expertise so that you can easily implement outsourcing into your business and get the best deal in doing so. OK. Outsourcing can change and transform your life and your business. And I really want to share this with you regardless of whether you are looking to get the Outsource Activation Consultation or not. OK. There’s a huge mountain you can learn here. And there’s also exercises and I encourage you to do these things. So, as I mentioned if you haven’t listened to the previous episode go and listen to episode number 52 where we introduce the consultation and then episode 55 where we look at model number one. So, this now is module number two. And in module number two we look at the nitty gritty of engaging with the right outsourcing service provider. So, let’s jump into it.
Right. First of all, one of the common questions I get to a lot is should you use a freelancer versus a company structure. OK. Finding a suitable partner for your outsourcing future is absolutely critical. It can make or break your experience so I want you to choose wisely. But don’t overthink it. OK. I want you to get in and do it now with over procrastination. This thing could take months or years to set up. You know there’s a few fear factors involved. Who are you really jumping into bed with. You know there’s a fear factor because outsourcing is typically involving a distant country. Somewhere that people speak a different language, there’s different culture. There’s time zone barriers and things like that. So, what I encourage you to do is start outsourcing. Dip your toe in the water and get doing it and then you will notice how easy things are and how easily the roles can expand. So, you know first of all I encourage you to get into it. Now, the freelancer versus company is an interesting discussion and it really does depend on your situation. You know do you have, are you a solopreneur? Do you have three employees or do you have 100 employees? Also, what are your plans for your company. OK. So, if you haven’t looked much a one in episode 55. I encourage you to do that where basically you are mapping out your strategic plan and your goals for the future. So, this will help you identify exactly what sort of team how big and the future of your company so I would suggest if there is any growth expectation for you. You need to think very carefully about the foundations you are laying when you start outsourcing. It’s very common for people to think that they can get a freelancer on Upwork and freelancer.com. And of course, you can but there’s potentially less longevity in that. And you know it takes a lot of training, coaching and building rapport and all of these you know softer things when you bring someone new on board. Okay. It is no different between hiring someone in your own country and an outsourced team member in another country. You still have to get to know them. And. So, what I want you to do is consider that if you spend, if you invest one or two years into someone. Are they are still going to be there if you change your business model in terms of how you outsource. So, by that I mean if you have a contractor on Upwork and then you realize you want to set up an in-house team and then you move over to a BPO service provider. Are you going to bring? Are you going to be able to bring that freelancer into that organization? You know for a start the freelancing might not want to move into an organizational structure. They might want to work from home. So, there’s all of these things where it’s important to kind of set the foundation right from the start. And at least being aware of these aspects so we run through this.
It’s important to know also the difference in structure between freelancers and agencies and full service BPOs. Okay. There are different outsourcing service models. The Upwork is on one end of the spectrum where basically it’s contract jobs and you fend for yourself. The other end of the spectrum is a full-service BPO which is a business process outsourcing service provider. And they effectively will guarantee you not necessarily staffing or manhours but they would actually guarantee you an output or a result. Okay. And so, there’s a spectrum where you need to decide what services best suit your needs and also you know what suits, best suit your time allowance, your cost allowance, your appetite for risk and all of these different aspects. So, what I want to do briefly is discuss four main models of outsourcing. OK, this is very broadly summarized but effectively there are freelancers and contract workers you see those people on places like Upwork and freelancer. OK. So that is number one then number two is a seat leasing operation. OK. Where effectively it’s like Regus. You know you are effectively finding an office space within the Philippines and they will rent you a seat and effectively then you can arrange the staffing and they are housed and they will provide some basic services for that. The third level then is staff leasing where effectively they will help or the service provider will help manage your staff they will help recruit your staff and they will obviously house them within a good safe office environment. So, as you go up the service ladder they are doing more and more for you. The staff leasing is very common and its effectively full service up to the point of where you know they are doing everything for your staff. They are kind of curating and managing your staff and it’s almost like a hotel service but you are the one in charge of running the operations and setting the tasks for your staff to do. OK. So, it’s a critical difference in that you still have to set KPIs, you have to do the business processes, you have to train them what to do. So, then the fourth one is the comprehensive outsourcing. Okay. And this is kind of where outsourcing started and this is business process outsourcing in its truest sense. So, you can go to certain BPO service providers and say well you wouldn’t say I want 10 staff to do this this this. You would say I want 15 calls answered per hour from incoming customers and I want a satisfaction rating of A+. Okay. Now the BPO service provider will take that specification and they will find the staffing and they will work with you to create the processes that those staff will be carrying out. But it is then up to the BPO service provider to actually provide that servicing structure. Okay. And all you really pay for then is the output which is the calls are answered and you get us a customer satisfaction rating of A+ for example. Okay. So, I hope I can that there is a little bit difficult to explain without resources sitting in front of you. So again, do look at show notes that is at outsourceaccelerator.com/58.
So, one of the activities that we suggest here is the outsourcing requirement template. Okay. And this fits in a little bit with the from the previous episode in the previous module where you have your process mapping tree but there is a different template for this where it’s effectively establishing what you want. What roles you need attend to first or what outputs? And then what is your service level requirement. Okay. Do you want minimalist service oversight? Where you do most things yourself and of course then the cost is most to minimize the hassle factor is increased. Or do you want the most hands off automated approach where service levels are high cost is relatively higher. But you also then buy into the years of experience that that outsource service provider is offering. So, these are the things we look at and you know we work through this outsourcing requirement template with you.
Then we dive into you know we give you some examples of the contracts and service level agreements that you would find within outsource service providers. The industry now is you know 20-25 years old. So, there’s been significant maturation within the industry. And as a result, there is relative standardizations of the outsourcing contracts and service level agreements. Also, I want to give you assurance that you know people are a little bit freaked out by coming over to the Philippines. What is the legal system like? What are the contracts like? Are people trustworthy? I wanna give you assurance that the outsourcing sector has grown up by servicing Western clients. And you know it’s a sector that knows not to bite the hand that feeds it. And it’s a sector that has very good levels of Western style contracts and observation of those contracts. So, I really want to assure you that don’t overthink making a contract with an outsourcing service provider in the Philippines. There are very few examples where things go wry in terms of this. Of course, you have to do your homework in choosing good suppliers because of course like any market, any market at all. There are good, bad and average suppliers in everything.
So, the next aspect of the module is the inquire, negotiate and hire. So, as I mentioned there are very standard approaches to outsourcing now and it’s important that you know what you should be asking for within the contract. Okay. It’s good to prepare an inquiry template which includes a brief summary of your business and core services and products. Prepare to allot time in going through interviews and meetings with potential partners and then of course you know you can negotiate on price and a trial period and the time period. It is critical to realize that outsourcers have an interest in you being with them for two to three years. Typically, outsourcing service providers don’t make a lot of money from you especially if you’re new at outsourcing and you start with a small team. It is highly unlikely that any outsourcing will make money from you in the first year. So as a result, they really want to tie you in for one to two, to ideally three years. And they wanna see that your team is growing. I would suggest to you that obviously you want as few tie ins as you can negotiate. Of course, but it’s a bit of a give and take. Okay. And the outsource service provider really needs to have confidence that you are going to grow your team. Okay. And this is very commonly the case people start with one and then might quickly extend to you know 2, 3, 4, 5, 10 employees quite quickly. It’s also critical that you ensure that the contract is flexible. There are things within outsourcing called a build, operate, transfer where a lot of people especially the entrepreneur of the business community after a few years in outsourcing want to incorporate on their own. OK. And effectively set up their own office in the Philippines where it’s still outsourcing but its effectively what they’re referred to as a captive. OK. So, there are different aspects to outsourcing that again as I mentioned it’s important that you set the foundations right when you start. So, it’s critical that when you’re negotiating you discuss the callbacks in terms of if you want to take the outsourced team with you either to a new outsourcing or into your own incorporated company. Some outsourcing service providers even would assist you with a build, operate, transfer into your own company structure and others would actually try and discourage it. So, it’s really important to know these aspects. Other aspects include obviously all of the staffing cost and the 13th month is included whether there are any additional costs and whether there is a transparent pricing structure or whether there is opaque monthly pricing structure.
Okay. So, these are all things that we cover in this module and the things that I want. It’s really critical for you to consider there are not too many hurdles and trip ups in outsourcing. I want to assure you that generally the industry now it’s pretty standardized. Again, it’s buyer beware. So, if you go with the better brands you’re generally doing okay. But like any negotiation it is a buyer beware exercise. And it’s important that you know the key asks so that you get the best out of your negotiations. The pricing structure is critical. You want ideally a transparent pricing structure where you are paying for a seat as they refer to it. Okay, so a monthly fee for the seat and then effectively you pay whatever salary the outsource or the team member is getting. And that is separate so that it disentangles the person salary from the services that you’re paying to the BPO. Okay this is far better because if you want to give someone a bonus or you want to hire an expensive person or you want to hire a very cheap person then effectively the cost of that seat is disentangled from that arrangement. So supercritical to look for that.
Okay and then finally a part of module two is the $50 exercise. Okay. This is an exercise that we have set up and it is one that is pretty simple in nature but the intention of this is to get you started. OK. I want you to start outsourcing today. OK. Do not procrastinate. Just get on the outsourcing bandwagon. So, I want you to have a budget of $50 and I want you to go on Upwork or Freelancer and set a task for someone. OK. It can either be, I mean for $50 it’s likely to be a singular project or you know if you spend a little bit more money then you can effectively set up some sort of relationship with a virtual assistant where they might work for you for a month for let’s say two hours a day. These are really interesting exercises to do not because you will learn about that person so much but actually because you will learn a lot yourself about how to delegate, how to manage someone remotely and how to clearly set expectations and roles and activities. And so that also there’s a lot of clarity in the process for you but also for the person doing the role. OK so we know we often say at Outsource Accelerator that outsourcing, sure we can teach you how to outsource. You know we can teach you about all the perceived scary things in the Philippines and how to get the best deal but actually there’s a huge amount of learning and education that you need to do so that you can best optimize your interaction with your new outsourced team. So, the $50 exercise will encourage you to start now and it will get you used to the early stages of outsourcing. Setting a project, setting the outline of the project, reviewing the deliverables and then sending it back and then getting something that you are happy with.
So just a quick recap. This is module two of the outsource activation consultation. It’s about engaging the right provider. So first we look at whether you should outsource to a freelancer or a service provider. And in that I say that it depends on your future. Okay where are you going with this. And what I caution you to do is set the foundations right. Make sure it’s correct from the start because if you do then need to redo those foundations. It’s not so easy once you have invested in a team. Then we looked at different outsourcing service models. Suffice to say that there are about three to four key outsourcing service models within the outsourcing sector. Okay, people dress them up and call them different things. But effectively, there are four different outsourcing service models that you should know about. Then there is an activity where effectively we get you to look at what outsourcing requirements you need so that you know which service provision suits you and what sort of team and what sort of processes you’re looking for. Then of course the contracts and SLAs the service level agreements are really important. Okay. And it’s about knowing what to ask for. OK it’s about knowing the standards. And again, these things are quite standardized and trying to get the best out of it for yourself. Yet also obviously having your outsourced service provide happy with their lot as well. Then of course it’s about inquiring, negotiating and hiring both the service provider but then also the team within that. And of course, we just discussed the $50 exercise where we encourage you to start outsourcing something anything a little project now. So, you are learning yourself in developing your outsourcing skills. OK. Which do take a little while to hone.
So, I hope you enjoyed that. That is the module two of the outsource activation consultation. If you want any of the resources then go to our show notes that is at outsourceaccelerator.com/58. And as I’ve mentioned if you want to listen to the early episodes about this activation consultation that is at episode 52 and 55. So, hope you enjoyed that and we will be back soon with the module three of the outsource activation consultation.