In my work with Elance Online -- an online marketplace that helps small businesses outsource almost any type of project Ive talked with dozens of buyers who have successfully outsourced projects as diverse as administrative support, business strategy, graphic design, web design and development, writing and even software development.
When I talk to buyers whove mastered the art of effectively managing external service providers, the same themes emerge over and over. Ive distilled their advice into the following Top 10 Best Practices for working with external service providers. Following this advice can help you get the most out of your relationships with external vendors or contractors -- whether you use the web to find service providers or are requesting and evaluating quotes from vendors the old fashioned way.
1. Clearly define the scope and schedule for your project
This might seem obvious, but any successful outsourced project always starts with a clear statement of what you are hoping to accomplish. Define your project requirements up front. Service providers need accurate, complete information to present you with realistic proposals and to quote you a reasonable price. Be specific about the deliverables you expect the vendor provide. Give vendors as much information as you can about what you need delivered and the way in which you need the work done. Also, be clear and realistic about your schedule requirements - project schedules can have a huge impact on project costs.
2. Evaluate a service provider like youd hire a full-time employee
When youre evaluating proposals from service providers, dont be afraid to ask questions. Just like hiring a full-time employee, selecting a vendor is a very subjective experience. Check their references and ask for feedback from other clients who have used their services. Engage in a dialog if you have any concerns about a vendors specific capabilities, voice your concerns. Dont just stew about it and hope for the best.
3. Look for specific experience fit
Ideally, the service provider you select will have specific experience with the type of project that youre undertaking. You dont want to be somebodys guinea pig. This is especially crucial when outsourcing complex technical projects such as software development. For example, if youre looking for someone to develop an application for the Palm PDA, make sure theyve actually completed commercial projects on that platform for other satisfied customers. This advice holds true for other types of projects as well. If you need a business plan for opening a retail store, youll get best results if the consultant you hire has verifiable experience in the retail sector.
4. Dont choose a vendor based solely on price
Though it might be tempting, never select a vendor based solely on price. Experienced buyers who have outsourced many projects and evaluated hundreds of proposals almost always recommend discarding the highest-priced and lowest-priced bid. Buyers report that their most successful projects are the ones where they felt the vendor offered a balance of good value and quality results.