8 Considerations for Selecting an Outsource Provider
What is your time worth? This is an often-overlooked question by franchise owners.
Operating a viable franchise requires a business plan that outlines the vision and actions that are required to achieve profitability, scalability and other measured successes. When franchise management is caught up in the day-to-day operations such as staffing, accounting, licensing, marketing, supply chain management, construction and everything in between, the business plan can act as a compass for staying the course.
Carrying out a business plan can also mean knowing when and what you can manage on your own and what makes sense to outsource.
Two key indicators for outsourcing are:
- More focus can be dedicated to enhancing the customer experience.
- The task or service is beyond your expertise.
For many franchise operators, just the notion of outsourcing is easier said than done.
Time and trust typically can be the biggest barriers to collaborating with external partners. When you’re in the trenches of running your franchise, finding the time to plan for how and when to outsource may seem daunting. What’s more, when you’re used to “doing it all” yourself, the notion of putting your trust in a third-party to deliver a service can be worrisome.
Ensuring your outsourcing relationship is solid from the start will help instill trust and accountability.
Here’s some guidance for selecting an outsource partner that can not only increase productivity and profitability, but build trust as well.
Compare the mission statements of a prospective outsource-partner to your own. Is their mission statement in line with yours? Having shared values and purpose is important for laying the foundation of a trusted partnership. Similarly, having similar employee cultures can also be a good sign of a compatible working relationship.
Outsourcing means you’re not in direct control, so articulating performance expectations with clearly defined goals is important. Entrusting another party with sensitive data, proprietary franchise knowledge, and even control over implementation and ongoing quality take a high degree is not always easy to do. However, establishing clear processes for delivery and communication can build trust and accountability.
Before a full-on commitment to an outsource provider, consider initial testing on a smaller scale. Choose a “test” project that is not central to generating profits and try out one or more outsourcing scenarios. This enables you to evaluate several options to make sure you’re securing the best outsourcing opportunity for your franchise. Once you have a comfortable level with a specific vendor, consider a phased-in approach with a smaller project so you can test and learn on the measured output and build trust.
Franchises, in general, tend to be demand-driven, so making sure there’s flexibility with the terms of your outsourcing agreement is wise. A good outsourced service provider will develop custom solutions that meet your franchise’s specific needs now as well as where you want to be in the months ahead.
Considering your outsource provider as a true partner versus customer/vendor relationship helps to avoid misalignment in service delivery that can lead to difficulties. To make the most of your partnership focus on strategic long-term planning, in addition to the transactional imperatives.
Insist on constant communication. Awareness of what’s going on, prevents potential problems and can improve your franchise operations. With advanced technologies, dashboards and pre-determined reporting plan in place, communication will be clear and less room for misinterpretation. This also helps negate any unforeseen disruptions.
Dig as deep as you can when exploring outsourcing options. By making sure an outsource provider understands how your franchise works will not only add efficiency but also help focus your efforts to ensure that the areas with the highest level of business impact get the highest priority.
Consider going beyond the reference check provided by the outsource provider. Who are your competitors using? Which vendors are gaining headway in the industry? These and similar questions can help present a clearer picture of your prospective vendor’s market share.
Outsourcing can be an essential tool for executing your business plan for peak performance and profitability. Understanding that your outsource provider’s success is contingent on your success will help lay the foundation for finding harmony within a true partnership.