20-25% of outsourcing relationships fail within two years. The primary cause isn't bad vendors, it's unprepared clients. Organizations rush to find a BPO provider before documenting processes, defining success metrics, or understanding what they're actually outsourcing. Then they blame the vendor when things fall apart.
Outsourcing doesn't fix broken processes. It amplifies them. If your workflows are undocumented, inconsistent, or dependent on tribal knowledge, a BPO partner will struggle just as much as your internal team, except now you're paying someone else to struggle.
Before evaluating vendors, work through this checklist. It will save months of frustration and potentially hundreds of thousands in failed implementations.
1. Document Your Current Processes
If you can't explain precisely how a task gets done today, you can't transfer it to someone else. Create step-by-step documentation for every process you plan to outsource. Include screenshots, decision trees, and exception handling procedures.
Reality check: If documentation doesn't exist, your process lives in someone's head. That's not outsourceable; it's a single point of failure.
2. Standardize Before You Outsource
Are different team members doing the same task differently? Fix that first. BPO providers need consistent inputs to deliver consistent outputs. If your accounts payable team processes invoices three different ways depending on who's working that day, your outsourcing partner will inherit that chaos.
Reality check: Standardization is your job, not your vendor's.
3. Define Clear Success Metrics
What does "good" look like? Define specific, measurable KPIs before engaging any vendor. Processing time, error rates, cost per transaction, turnaround time whatever matters to your business, quantify it. Without baseline metrics, you can't evaluate performance.
Reality check: "Better than before" isn't a metric. Neither is "I'll know it when I see it."
4. Identify Exception Handling Procedures
Standard processes are easy. Exceptions are where outsourcing fails. Document how you handle unusual situations, escalations, and edge cases. If your team uses judgment calls fifty times a day, those decisions need to be codified before handoff.
Reality check: Undocumented exceptions become your BPO partner's daily crisis.
5. Assess Technology Readiness
Does your BPO partner need system access? Which systems? What security protocols are required? Resolve technology access, VPN requirements, and permissions before signing contracts, not during transition.
Reality check: Technology integration delays kill more outsourcing timelines than any other factor.
6. Calculate True Costs (Not Just Hourly Rates)
The cheapest hourly rate rarely delivers the lowest total cost factor in management overhead, quality review time, and rework. A provider charging 20% more but delivering 90% first-time-right accuracy costs less than a cheap provider with 60% accuracy.
Reality check: You'll spend internal resources managing any BPO relationship budget for it.
7. Plan Knowledge Transfer
How will you train your outsourcing partner? Who will do it? How long will it take? Knowledge transfer requires dedicated internal resources, often your best people, for weeks or months. If you can't commit that time, you're not ready.
Reality check: "They'll figure it out" is not a transfer plan.
8. Establish Communication Protocols
Who talks to whom, how often, through which channels? Define escalation paths, regular check-in schedules, and response time expectations. Time zone differences make this even more critical for offshore arrangements.
Reality check: Communication breakdowns cause more BPO failures than competency gaps.
9. Prepare Your Internal Team
Outsourcing changes roles. Some staff become reviewers instead of doers. Others become relationship managers. Some positions may be eliminated. Address organizational change before it derails your initiative.
Reality check: Internal resistance kills outsourcing initiatives faster than vendor problems.
10. Define Exit Criteria
What happens if it doesn't work? Define contract terms, data ownership, transition procedures, and minimum notice periods. Hope for success, but plan for the possibility that you'll need to bring work back in-house or switch vendors.
Reality check: The time to negotiate exit terms is before you need them.
Why Companies Skip This Work
Preparation takes time. Leadership wants results now. Vendors are eager to start billing. Everyone has incentives to skip documentation and standardization.
But organizations that succeed with outsourcing treat preparation as non-negotiable. They document first, standardize second, and engage vendors third. They invest weeks up front to avoid months of rework later.
The BPO provider you eventually choose will thank you. More importantly, you'll actually achieve the cost savings and efficiency gains that made outsourcing attractive in the first place.
Assetsoft helps organizations prepare for successful outsourcing through process documentation, standardization, and technology readiness assessments then delivers domain-trained managed services for property management operations. Learn more at www.assetsoft.biz
