5 Top Tips for Strategic Sourcing
22/02/10 13:14 Filed in: Strategic sourcing
Agentplus allows property management businesses to strategically source tasks such as property administration, trust accounting and IT application support by providing a hosted state-of-the-art property management software application with associated personnel to provide the back-end services. As providers of strategic sourcing services to real estate businesses, we were asked by the editors of SOLD magazine to provide our top tips for strategic sourcing. Strategic sourcing is a significant decision for any business, and one which should not be taken lightly!
Here is our list of the 5 most important things to consider when outsourcing any business process to any provider:
1. Evaluate a service provider like you’d hire a full-time employee
When you’re evaluating proposals from service providers, don’t be afraid to ask questions. Just like hiring a full-time employee, selecting a partner is a very subjective experience. Check references and ask for feedback from other clients who have used their services.
2. Don’t choose a partner based solely on price
Though it might be tempting, never select a partner based solely on price. To get the best service possible, it is worthwhile ensuring that the project is solid financially for both parties; this will ensure that you will always receive the best level of service possible. Experienced strategic-sourcers report that their most successful projects are the ones where they felt the partner offered a balance of good value and quality results.
3. Establish a good partnership & maintain constant communication
A good partnership is the key successful strategic sourcing. Ensure that you have a nominated project “sponsor” in your business who has an “opposite number” in your proposed partners business. You should communicate and explain all the objectives/goal that you wish to achieve within a certain period of time to both your proposed partner and to your staff right from the beginning of the contract and ensure that these channels of communication remain open and healthy for the period of the contract.
Establish a formal communication system both for regular updates and other ad-hoc communications. Outsourcing business processes means that things within your business will change, and can be a stressful time for employees who are not used to “doing things differently”. It is important to manage new expectations with your staff right from the beginning.
4. Agree to a service level agreement.
It is important to discuss the level of performance that you expect from your partner or service provider. Once you have established a service level agreement, agree on a set of performance indicators. Measure your partners performance regularly based on these indicators and check whether they're able to meet the required or agreed level of service or performance.
5. Measure Success
You should always evaluate the success of your projects. Most times there will be obvious financial benefits, but other efficiency gains or reasons for outsourcing can be harder to quantify. These could include generating a higher profile for your business, more credibility, or greater customer satisfaction. Consider how you will measure these intangibles before the project has commenced.
Managers from both large and small businesses are always looking for creative ways to accomplish more of their business goals for less money. Strategic sourcing of non-core activities can help you save time, money and frustration and can most definitely help you continue to build your business!
Here is our list of the 5 most important things to consider when outsourcing any business process to any provider:
1. Evaluate a service provider like you’d hire a full-time employee
When you’re evaluating proposals from service providers, don’t be afraid to ask questions. Just like hiring a full-time employee, selecting a partner is a very subjective experience. Check references and ask for feedback from other clients who have used their services.
2. Don’t choose a partner based solely on price
Though it might be tempting, never select a partner based solely on price. To get the best service possible, it is worthwhile ensuring that the project is solid financially for both parties; this will ensure that you will always receive the best level of service possible. Experienced strategic-sourcers report that their most successful projects are the ones where they felt the partner offered a balance of good value and quality results.
3. Establish a good partnership & maintain constant communication
A good partnership is the key successful strategic sourcing. Ensure that you have a nominated project “sponsor” in your business who has an “opposite number” in your proposed partners business. You should communicate and explain all the objectives/goal that you wish to achieve within a certain period of time to both your proposed partner and to your staff right from the beginning of the contract and ensure that these channels of communication remain open and healthy for the period of the contract.
Establish a formal communication system both for regular updates and other ad-hoc communications. Outsourcing business processes means that things within your business will change, and can be a stressful time for employees who are not used to “doing things differently”. It is important to manage new expectations with your staff right from the beginning.
4. Agree to a service level agreement.
It is important to discuss the level of performance that you expect from your partner or service provider. Once you have established a service level agreement, agree on a set of performance indicators. Measure your partners performance regularly based on these indicators and check whether they're able to meet the required or agreed level of service or performance.
5. Measure Success
You should always evaluate the success of your projects. Most times there will be obvious financial benefits, but other efficiency gains or reasons for outsourcing can be harder to quantify. These could include generating a higher profile for your business, more credibility, or greater customer satisfaction. Consider how you will measure these intangibles before the project has commenced.
Managers from both large and small businesses are always looking for creative ways to accomplish more of their business goals for less money. Strategic sourcing of non-core activities can help you save time, money and frustration and can most definitely help you continue to build your business!