1 Know what you're getting into

You can outsource pretty much any area of your business, be it a process such as recruitment, or infrastructure such as IT. “Finance accounting outsourcing is fashionable at the moment; human resources outsourcing also,” Martyn Hart, the chairman of the National Outsourcing Association, said. “The whole rationale of outsourcing is economies of scale.”

2 Do you really need it?

The most important consideration is where outsourcing fits into your business plan. Once you have identified areas of your business that you think might benefit from outsourcing, you need to work out whether they are something that you are particularly good at (“your core competences”, according to Mr Hart; Sanjiv Gossain, the UK managing director of Cognizant, the outsourcer, describes them as your “crown jewels”), which you should keep in-house, or a commodity, such as running your PCs, which may be done better and more cheaply by an outsider.

3 Choose your provider carefully

The point is that the provider should be seen as a partner, so you must take into account its culture and whether it lines up with yours. Your own motives need to be considered, too.

4 Get your foundations right

This is all about the contract and the service level agreement (which allows the measurement of performance). In them, you need “good articulation around how the pricing works, how change is managed. Issues like innovation should be addressed,” Duncan Aitchison, the president in EMEA at TPI, a sourcing advisory company said. “The contract gives you the opportunity to have a successful relationship .”

5 Make room for change

Your contract needs the flexibility to cope with changes in your finances or your market - for instance, if you bring out a new product or are hit by the credit crunch. Your outsourcer needs to flex with you, not hobble you, in these circumstances and this is why it's so important to have a true partnership with it, Mr Gossain said. He strongly advised including an exit clause: “The world could change tomorrow and you might have to bring that service back in-house.”

6 Manage the transition

“The work to be outsourced should be something that can be learnt by the outsourcer in four to six weeks, as a rule of thumb,” Peter Scott, the head of commercial and industrial sector at Alsbridge, a sourcing advisory company, said. “Otherwise the cost of transition is likely to be too high ... We tell our customers if you've done it in-house before and now you're doing it outside, there will be new roles, new governance and you may have to grow your people,” he said. some employees may, therefore, need to learn how to manage the partnership.

7 Keep an eye on your provider

“A lot of clients don't realise how much resource you have to put in to manage the relationship,” Mr Scott said. “You need a contract manager, someone to look after processes. They are there to manage the relationship from an operational process perspective and to communciate change in the business to the supplier.”

8 You're not handing over the risk

“One of the fundamental rules of outsourcing is that your partners's problem is your problem,” Mr Scott said. Mr Hart added: “People talk about transferring risk, but that's not really possible because it's your business. You can transfer some responsibilty.” Remember that under British and European law, it is not possible to impose penalties on outsource providers for poor service; instead, there is a complicated system of service credits, whereby if the provider does not meet performance targets, some of its credits are withheld by the customer.

9 Retain a healthy scepticism

Don't be blinded by the sales pitch, Mr Scott said. “Sometimes clients suspend their normal commercial scepticism.” If a supplier reckons that it can cut the number of people you need to work in an area by half, ask how it's going to do that. If it all goes wrong, it will be your company that suffers.

10 Take the long-term view

Although the 15-year mega-contract is less common nowadays, organisations still need to be thinking of outsourcing as a relationship that's going to last about five years. “If you're just thinking of how this will help your business today, it'll be wrong tomorrow,” Mr Aitchison said.

. . . and bringing it back

Orange has announced that it is to close call centres in India and transfer the work back to Britain.

The company is the latest in a string of organisations, including Powergen, eSure and Jet2holidays, to reverse outsourcing decisions in an effort to improve customer service

Several NHS Trusts decided against outsourcing their medical transcription services after Unison, the union, highlighted mistakes made by transcription services taking part in pilot trials in South Africa, the Philippines and India

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