How Is Success Defined with an Outsourcing Agency?

The decision to outsource parts of your business operations is a significant first step. Next is the equally important task of defining what success looks like so clear objectives can be set and measuring those objectives can take place. According to Statista, business process outsourcing (BPO) will reach US $390 billion in 2024. With an experienced outsourcing agency like OSI by your side, you can tap into our expertise to help develop unique measurement practices for your business.

What Are Your Goals?

Before anyone starts working for you and your business, create clear, achievable objectives that can be measured and tracked. As with any business objective, they can change once work has begun, but if you start a new venture without setting goals, you’re asking for failure. Would you ask for capital from a bank or investor without a business plan? It’s doubtful, and this new partnership should be treated with the same amount of preparation.

What Metrics to Measure

The goals you come up with must be measurable; vague goals can’t be measured effectively and could hurt this new business relationship. Another thing to consider is measuring metrics that fully represent the work being completed. You’ll get faulty results if you are too heavily focused on one or two areas. Create a scorecard that can be standardized and used across each member of the outsourcing agency for fair and balanced measurements.

Service Quality

Service quality can be an all-encompassing category that needs guidelines placed around areas of your business where it’s needed the most. Here are some topics that may make the cut in your scorecard:

• Availability: During the workday, what is the percentage of time they are available to service clients versus offline or doing other duties?
• Accuracy: Are their answers accurate if a client asks questions about a product or service? Or are the orders they put through for a client correct to what the client was expecting?
• Interaction quality: Do the agents receive complaints or praise? In email communication, does the tone match the personality of the business?
• Surveys: With customer surveys, are there any areas that need improvement?
• Document and customer privacy: Customer information is highly regulated, so are the needed steps in place to protect that information? Have there been any documented mistakes?

How important is service quality? Extremely important. A recent HubSpot report found that 93 percent of customers will make repeat purchases with companies that offer excellent customer service.

Cost Management

You could be looking at the overall costs associated with hiring an outsourcing agency and the cost efficiency of the employees in terms of the services they are providing. Nevertheless, here are some examples of what you could track on the scorecard:

• Increased revenue
• Discounted pricing
• Return on investment (ROI)
• Operating expenses

Operational Efficiency

According to Salesforce, 80 percent of customers now consider the experience a company provides to be as important as its products and services. It’s one thing to do a job, but is the job being done well and up to the standards of the business they represent? That’s a question for any employee, not just for an outsourcing agency, so you may already have some metrics that can be used for these purposes:

• On-time delivery
• Response times
• Productivity

Strategy and Growth

Getting your outsourcing operation off the ground is just the beginning. How you strategize for future stages will be critical to your growth potential. By building milestones, you can plan for potential successes and how you will tackle any challenges that come your way. With a scorecard and coupling that with your strategy and growth potential, you’ll quickly see where you stand at any given time.

Regular ROI Audit

The scorecards and goals create a more efficient and effective ROI calculation. If done correctly, ROI, or return on investment, gives you exact returns on your initial and ongoing investments. For instance, if you initially invested US $60,000 towards your new business venture, but after a year, you profited US $100,000, would that ROI meet the standards or goals you set out?

Make Clear Objectives When Engaging with an Outsourcing Agency

When engaging with an outsourcing agency, it’s beneficial to set some internal goals but lean into the experience of your new partner to help iron out any lingering questions. OSI is your trusted partner in nearshore or offshore outsourcing. We have qualified individuals ready to help in any business operations you need.

Contact us today, and let’s grow a successful partnership together.

A Guide to Calculating ROI for Outsourced Sales Teams

As with every aspect of your business, understanding the cost breakdown is the fiscally responsible thing to do. You could have an accountant who helps track all your costs, or maybe you’re starting a new venture and need to understand the cash flow better. Calculating your business’s return on investment (ROI) is crucial, but breaking it down by business sector can be more beneficial. According to Statista, the global business process outsourcing (BPO) market will hit US $390 billion in 2024.

The more informed you are, the better long-term decisions you can make to ensure success for your business. Do you have a plan in place measuring the financial strengths of your business? It’s time to jump into the ROI formula for sales, specifically for outsourced sales teams.

What is ROI for Outsourced Teams?

Suppose you have dealt with remote workers or outsourced aspects of your business before; that’s great. If you don’t, there is no need to worry. This guide is meant to set you up for success in working with an outsourcing partner like OSI.

ROI for outsourced teams accounts for all the costs associated with retaining their services versus the value brought into the business. The value could be monetary, tasks completed, or the number of customers serviced. Still, tracking the predetermined key performance indicators (KPI) you’ve chosen for your business ensures the investment makes financial sense.

Why ROI Matters in Sales Outsourcing

Specifically, an ROI formula for sales ensures you and your outsourcing partner have clear goals and expectations for the most fruitful partnership. Before explaining what precisely goes into the ROI formula, it’s important to pull back and look at the bigger picture of why you need to be vigilant:

• Risk mitigation: Understand any risks with outsourcing and plan for contingencies. What metrics or behavioral concerns are deal breakers?
• Long-term planning: Calculating ROI is not a one-and-done activity. Consistent checking on the ROI needs to be a part of your monthly/quarterly sales numbers; you’ll use it to help forecast future revenue.
• Financial responsibilities: Ultimately, you’re answering to the business’s success or failure, so determining the full impact of every aspect could make or break your business. You might be able to spot something that needs to change with enough time to correct it.

Components of the ROI Formula for Sales

Although the formula looks relatively simple, understanding it and including the correct numbers make all the difference.

You’ve calculated that the initial cost for a second office is $75,000. In the first six months, the profit from the sales is $300,000 minus your initial $75,000 investment, making your net return $225,000.

With the high-level ROI formula for sales now laid out, it’s time to learn what goes into those data points.

Calculating ROI

It’s one thing to know the formula, and it’s another to ensure the data included in the formula is accurate.

1. Initial Costs: Costs associated with the venture at the beginning of the process, training costs to get the outsourced team up to speed, technology improvements to match what is needed for your business, setup fees to start the business relationship, and travel costs if you need to spend time with the group in person.
2. Ongoing Operational Costs: Ongoing costs would include salaries, facility costs, commissions, outsourced management fees, and anything to run the day-to-day operations of the business.
3. Revenue Generated: Direct and indirect sales that are closed through the outsourced sales team.
4. Calculate the ROI: Once you have gathered all the needed data, you can plug that into the ROI formula for sales:

Here’s another item: top-performing sales organizations conduct at least six annual role-plays with their sales force. That could be with a company or you, the business owner, but the ongoing training needs to be accounted for.

Common Pitfalls to Avoid

Understanding and executing the formula to start a relationship is great. Still, some areas can, and will, pop up if you aren’t diligent or don’t have transparent practices to gather what is needed accurately.

• Overestimating or miscalculating your revenue.
• Before starting the process, you don’t fully understand the time needed to get up to speed.
• Misunderstanding the operational or indirect costs will affect the ROI.
• There is no clear ongoing measurement plan: costs and margins change so that the ROI will fluctuate.

According to Hubspot, on average, a new sales rep will take 3.2 months to ramp up to total productivity. Work with your outsourcing partner to help avoid these pitfalls and address any questions.

Understand the ROI for Outsourced Sales Teams

You’re embarking on a significant business investment by outsourcing your sales team. You aren’t taking it lightly, and neither should your outsourcing partner. Use the ROI formula for sales to determine a minimum viable return needed to ensure success and be transparent with every member of the decision-making and partner levels. The more awareness there is of the goals, the better off you will be.

OSI is a premier outsourcing partner with many years of experience across multiple verticals, including sales, accounting, IT support, customer service, operations, and more! Contact us today to see how we can make your move into outsourcing as smooth as it can be.

Flexibility is the hallmark of a great business. Outsourcing in various forms gives your organization the agility of a world-class boxer in your business. You can bob, weave, and engage with outside talent when needed instead of keeping someone on the payroll. These methods are especially advantageous for startups with tight capital or legacy businesses looking to evolve. Did you know there are three main options -onshore vs. nearshore vs. offshore – to choose from?

Why You Should Consider Outsourcing

Every business is like a snowflake; no two are alike, so every viable business option should be on the table. Whether your business is in software development, manufacturing, tax services, or even a law firm, there is an outsourcing option right for you. A recent Deloitte survey shows the top objectives for companies looking to outsource aspects of their business are:

• Cost-reduction
• The tight local hiring market
• More opportunities due to global business practice standardization

Outsourcing is no longer reserved for the most prominent organizations in the world. No matter your size, you can utilize the benefits of outsourcing. Thirty-seven percent of small businesses now outsource at least one business process. Let’s review the outsourcing options of onshore vs. nearshore vs. offshore.

What is Onshore Outsourcing?

Onshore outsourcing involves using talent from the country where your business resides. You can think of this as freelance or contract workers from “local” locations. You will pay a premium for the onshore option, as the cost of living and everyday expenses will be the same as what you currently pay for employees on payroll.

Why Choose Onshore Outsourcing?

A few benefits of onshore outsourcing include choosing individuals who can come onsite for regular meetings, reduced cultural misunderstanding, and no monetary conversion fluctuations. If you have a project that requires only limited time, this could be your best option. Typically, nearshore or offshore options want longer-term project commitments. Based on the project’s needs, your potential talent pool could be less with onshore outsourcing.

What is Nearshore Outsourcing?

Nearshore outsourcing encompasses talent whose location is physically near the country where the main business resides. For example, if your company was based in the United States, a nearshore outsourcing option would be Canada, Mexico, or El Salvador. A bonus with El Salvador is that the US Dollar is the national currency, so payment conversion issues are eliminated.

Why Choose Nearshore Outsourcing?

As with any project, you should expect some hiccups. A major advantage of nearshore outsourcing is the proximity to your main location. If an issue arises that requires you to physically be there, a plane trip is just a few short hours away. Shared time zones are another chef’s kiss of choosing nearshore. Potential issues related to reaction times to projects and communication needs will be greatly reduced compared to the fully offshore option.

What is Offshore Outsourcing?

Offshore outsourcing is typically located someplace else in the world from you and your business. Hot spots for offshore outsourcing are India, the Philippines, South America, and Eastern Europe, just to name a few. Offshore outsourcing options have increased from manufacturing to the entire spectrum of business processes.

Why Choose Offshore Outsourcing?

Offshore outsourcing is traditionally used for large projects for extended periods. Since offshore outsourcing is familiar, these places have established operations and deeply skilled workers to do virtually any job needed. According to Outsource Accelerator, a Filipino software developer with skills comparable to a US-based programmer’s will cost just 10 percent of their US counterpart. Offshore outsourcing can also be a massive windfall for physical production costs. Your overall costs will be significantly lower than the onshore option.

What Business Benefits Come from Onshore vs. Nearshore vs. Offshore Outsourcing?

The children’s story “Goldilocks and the Three Bears” comes to mind when thinking about onshore vs. nearshore vs. offshore outsourcing. You have three options, and all have their pros and cons, but when it comes down to it, nearshore outsourcing will, in most instances, be the best solution for you. It is not too far, which lengthens resolution times, and not too close, which raises the cost of the work being done. Nearshore is just right.

Here are more details as to why nearshore is a great choice: You get personnel relatively close in proximity, language and cultural issues are reduced, and, best of all, skilled workers for a more reasonable price than the onshore option.

Regardless of which option, onshore vs. nearshore vs. offshore, is right for you, the point is that you have a choice. The best part is that you get a staffing company well-versed in local talent, which lessens the load of having to find someone remotely.

OSI is Your Perfect Nearshore Option for Your Outsourcing Needs

Outsourcing has gone mainstream. Whether onshore vs. nearshore vs. offshore, don’t let your business struggle to find what it needs and when it needs it. If you are considering nearshore outsourcing, OSI services include a wide range of vocations, including IT, Accounting, Operations, and more!

Contact us today!