Advice on Picking the Right Outsourcing Service Provider

"The selection process is so key, and yet it typically becomes adversarial, with lawyers and consultantsÉ trying to drive vendors down to zero margins."–Ed Agar, PrimeSourcing Advisors


Finding the right outsourcing partner for your particular project is like finding the right mate — the importance of a good match can hardly be overemphasized. But how do you approach the search so that you end up with just the right partner for your needs?

"There is no perfect provider out there," according to Ed Agar, founding principal at PrimeSourcing Advisors. "They all have their limitations."

Mr. Agar's company uses an extremely granular, trademarked process it calls the PrimeSourcing Index to help companies evaluate potential sourcing partners. The process evaluates service providers using complex measurements that weigh not just a service provider in general, but granular data down to specific locations. The index narrows potential providers down to a few finalists, which the client company can then select from.

The PrimeSourcing system, which is meticulous in its detail (it uses 300 questions to evaluate each provider), works with clients to carefully identify sourcing requirements, expectations and objectives before beginning. You'll want to do the same as you undertake your search. As you begin looking for an outsourcing partner, start by viewing sourcing vendors as potential business partners. Most companies don't do that, Mr. Agar says, but that single attitude shift alone can make a big difference.

"The selection process is key," Mr. Agar says, "and yet it typically becomes adversarial, with lawyers and consultants involved, trying to drive vendors down to zero margins." That creates an antagonistic relationship right at the start, which is exactly what you don't want.

Instead, look for a partner that fits well with your company and philosophy. "This is a partnership," Mr. Agar says. "In fact, this is a marriage. It's a long-term relationship, and chemistry is very important."

For example, focus on commitment to quality. Talk with potential outsourcers about processes and how they run their operations. Once you work with the provider to create service-level agreements (SLAs), manage the provider to those agreements. As with any relationship, stay on top of things and communicate. Don't let the relationship with your provider slide. "You really don't want to get to the point where you're suing," Mr. Agar says.

Keying in on specifics is a hallmark of PrimeSourcing. Information about outsourcing providers supplied by analysts, Mr. Agar says, is often way too general. Also, it doesn't examine specific locations for outsourcing, which can be key. "It's not unusual for a provider to have problems at a specific location [only]," Mr. Agar says, so his firm examines specific locations with tremendous granularity–something you'll want to consider as you make your final selection.

Finally, Mr. Agar advises, keep in mind that not all of the best outsourcing firms are the biggest and most well-known. "There are some really terrific providers out there," he counsels, that aren't well known and consequently aren't on most company's radar screens. By looking beyond the obvious players, you can find a partner — and a location — that's truly the best fit for your company.

Summary: Go as granular as you can — even to examining a particular location — in picking your outsourcing partner. Keep the process from descending into adversarial discussions — this is a partner you'll be working with for a long time.

Useful Links:

PrimeSourcing Advisors

Ed Agar, (905) 886-1200