Top 5 outsourcing tips

Today the world is shrinking. We are becoming so intimate with those around us that pulling a face may be spotted in Bulgaria. Outsourcing is now big business and the most successful entrepreneurs understand the positives of outsourcing and anyone looking to get into business simply can’t overlook the benefits.

I have used plenty of outsourced freelancers and some experiences have been great and other had been disasters. Today I have a good understanding on when to outsource, who to outsource to and how to manage it. So I thought I would share my top 5 tips to make sure you get the most out of it.

1. Low Level – I personally wouldn’t recommend using outsourcing for value added tasks if you have not developed any prior relationship with the freelancer. If the project is a direct influence on value added for your clients or consumers then I’d keep it local. The reason for this is that when it comes to value, you always need to be accountable, now. When something urgently needs to be changed it is very difficult to jump back to your freelancer who is 8 hrs behind and say “hey, please change”. It might not matter if the project is relatively low level however playing with your value offering and not being accountable in a timely and efficient manner can be detrimental to your business. Go back to the 80-20 principle and outsource the 80… not the 20.
2. Geography - The word on the street is that if your going to outsource, to get the best value you need to head to China or India. I disagree. China and India are becoming more accustomed to people requiring freelance labor from the US, UK, Australia and Western Europe. Freelances in these two traditional outsourcing nations are now taking advantage of the fact that even if they triple their fees their clients still believe they are getting great value. When in reality, they are asking 3x the price for the same average quality. The emerging nations in outsourcing are coming from the Eastern European block as well as my favorite, South America. The reason I would recommend these regions is because they provide excellent value. They may not be the cheapest, which should never be the aim, but I believe these nations provide the best value. Value when it comes to outsourcing means less back and forth and more time your new project or development can spend bringing back a return. If you have spent 30% less yet had it completed 1 week later, how much was that week worth to you? Probably more than that 30%.
3. Secret deadlines - You need to remember that freelancers will do what it takes to get the job. Unfortunately this also means they will give you unachievable deadlines for project completion just to get the deal. You can never underestimate this so factor in a 150% deadline margin. 150%!?!?! Yes 150% (like how I read your mind there?). If you want a project completed for use in 2 weeks (this is your secret deadline), give the programmer a deadline of about 5 days and it may be done in time for your (secret) deadline. I once had a job that needed to be competed in 30 days and it was done in 90 days. This cost me time, money as well as reduced the perceived value from my client. I also have another designer I use for web banner designs and presentation designs etc who I factor in a 400-500% deadline delay margin for. He does a fantastic job but never meets a deadline so I just factor it in and never have any more issues.
4. Stick to the systems – There are many current online outsourcing facilitators such as elance.com, ifreelance and guru.com (among many others) and they have procedures in place to ensure safety and assurance for both the freelancer as well as you the buyer. These include measures such as using escrow, safe payment methods and arbitration services if your not happy with the job. Most importantly the freelancers and the buyer rate each other at the completion of the project. Freelancers consider this as one of the most important marketing tools available to them. A bad reference means a loss of business. This is good for the buyer as there is a level of commitment from the programmer to get a good job done within the deadline. You need to beware of a programmer trying to do work off the sites and going privately through email or Skype. The primary reason they will do this is to avoid paying commission fees to the facilitator but this also can enable them to slack off as they are no longer made accountable for their work. Doing this is a sure fire way for your deadlines to be missed (Im talking about the ’secret’ deadlines!) and crappy work to be submitted. Resist the temptation of working off the structured sites, even if the freelancer give you a better rate. Remember the above example of my programmer taking 90 days instead of 30, well this is how it happened.
5. Work History - Always read through a freelancers history and ask for previous work. Resist the temptation to go for the cheapest price straight away as the quality may reflect what you paid for it. This is pretty basic common sense but extremely vital to get the best out of outsourcing. However I do have a trick that I use which I will share so don’t dismiss the ridiculously cheap ones just yet. Using the main freelancer websites, put up a job offering for a very low level task such as data entry or CMS content submissions. You will most likely get many offers for these jobs and some very cheap deals. For the uber cheap deals, have a look at their history and when they joined the site. If they have no history and have just become a site member, it may mean that they are trying to build up a reputation and will work for next to nothing just so that they have some feedback to display. Think of Ebay sellers who buy $1 ear plugs to get their feedback levels up so that they can be taken more seriously to start selling. The best bargains are in this market as they will do high quality work for cheap in return for your positive feedback. There are always people like this and they can represent the best bargains. If its a low level task you have very little to lose and you never know, you may just find yourself another gun freelancer.

I hope these tips help. As the world continually gets smaller outsourcing will only continue to boom and by giving yourself the best possible understanding you can prepare yourself to enjoy benefits and of course, avoid the pitfalls.