Outsourcing contracts: A guide to starting your business deal

Outsourcing contracts: A guide to starting your business deal

Faith Ocampo Published on August 18, 2015Last updated on July 2, 2021

Outsourcing contracts protect both business owners and call centers from all unfavorable situations that may arise during a partnership. At the same time, it serves as the official document that details what both parties should expect from an ongoing deal.

hands of business executives BPO partner discussing outsourcing contracts

In other words, it guides the whole professional relationship formed by two firms that both benefit from offshoring. Drafting one, however, can be a complex process.

Of course, everyone involved must put an effort into making a comprehensive contract.

It must cover every possible aspect of the business partnership and anticipate future situations. Thus, all company managers involved must go through several consultations, research, and meetings before producing the final document.

If you’re about to embark on a new outsourcing deal, follow this guide to come up with a successful outsourcing contract with your customer service provider.

  1. Define the scope of the outsourced work

    business BPO executives discussing outsourcing contracts
    Although the most basic step, defining the scope of your partnership is the main purpose of outsourcing contracts. In this step, make sure to clearly identify the following:

    • the customer support services and other operations to be outsourced;
    • service levels, or business targets formally agreed upon by both parties;
    • work schedules;
    • required deliverables from both parties; and
    • the business owners’ tasks.

    In essence, this part determines both parties’ responsibilities and what they can expect from the deal, thus helping avoid future disagreements. Also, provide specific and precise task descriptions that will serve as both organizations’ primary reference.

  2. Seek legal advice from the best practitioners

    BPO business executives in luncheon meeting for outsourcing contracts
    Taking your services to call centers entails additional legal procedures. Especially if you’re offshoring to another country, it’s best to review local investment-related policies, tax laws, and other regulations that may affect your business. You may consult legal practitioners who are already familiar with similar types of deals to make sure that everything is covered by your contract.

  3. Go for the win-win situation

    executive team inspecting studying outsourcing contracts
    Outsourcing contracts must treat all parties fairly. In the middle of crafting a contract, try to look for ways to make sure that everyone wins. Although it’s tempting to squeeze in the best possible agreement so that you could ultimately gain more, think about long-term sustainability instead. If you want your partnership to work, your contract must reflect this.

    The best deals are characterized by equal amounts of compromise and flexibility to create room for possible revisions.

  4. Agree on penalties, benefits, and rewards

    business BPO executives shaking hands agreeing on outsourcing contracts
    Benefits and rewards attached to good performance and achievement of certain service levels can enhance your partnership with call centers. They act as incentives to motivate the company and its people to maintain a good work quality.

    Penalties, on the other hand, protect both parties in case one fails to satisfy what’s required of them. For example, there may be security issues, breach of contract, poor performance, and others.

  5. Plan for the deal’s end

    business executives holding on to outsourcing contracts
    Contracts may end for several reasons, and sometimes, you may not even get to the end of the contract period before it’s terminated. This depends on the unique conditions of your partnership. But regardless, you must prepare for contract termination. Make sure that you have a detailed exit plan so that both parties can cope with the consequent changes more easily.

Outsourcing contracts dictate the flow of a business’ partnership with call centers. It’s crucial to craft one that clearly articulates your expectations and responsibilities for a successful deal.

Faith is a digital media enthusiast aiming to become an active part of the tech world by sharing her insights. She likes to blog about everything digimarketing, technology, and social media.

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