What Are You Buying When You Outsource?

A strange shift in perception seems to take place when companies draw upon the services of outside service firms. If they were hiring a new staff member, the company would look for someone with demonstrated professional expertise, skills, and experience. Yet, too often, when outsourcing, the same company acts as though they were buying a commodity rather than a service.

Take the case of an organization seeking the help of an instructional design firm. The usual approach is, "We need a course to teach X population about Y product or service." Yet, what the organization should really be seeking to buy is the instructional design firm's talent, expertise, experience, and the willingness to create such a course at an affordable cost. In reality, what is purchased in such an arrangement is professional service; the course is merely a by-product (though clearly an important one!).

Tangibles vs Intangibles

The confusion appears to result because most organizations are more accustomed to contracting for tangible products than for services.

For example, when you put a new copy machine out for competitive bid, the specifications can be both tangible and specific, containing requirements like these:

• Single-sided copy throughput of at least 20 pages per minute
  
  
• Capacity to assemble, collate, and staple documents of at least 50 sheets
  
  
• Enlargement/reduction ratios of from 3/1 to 1/8
  
  
• Mean time before failure of at least 1000 hours

But, is that the way to obtain something as intangible as professional services?

Suppose, for instance, you were to request a price quotation from three different instructional design firms to develop a course for you.

Using the tangible products model you might prepare specifications such as these:

• Up to 160 person-hours design effort
  
  
• Up to 150 manuscript pages
  
  
• Lesson plans for two, eight-hour days of classroom instruction
  
  
• Delivery of completed manuscript within four months

Each of these specs is tangible and measurable. Yet, it is almost certain that the products (that is, the courses) the three firms produced would be quite different. Furthermore, the specifications given offer no certainty that any of the three courses produced would meet actual training needs.

Shopping for Intangible Services

How can your organization obtain quality results when shopping for intangible, professional services? The key qualities to look for are:

• Demonstrated understanding of your organization's problems and needs
  
  
• The clarity and plausibility of the professional services firm's recommendations for addressing those needs
  
  
• Appropriateness of the professional services firm's proposed solutions
  
  
• Commitment to your time constraints (assuming they are realistic)
  
  
• Experience, qualifications, and previous success record
  
  
• And finally, the affordability of their proposed solution
  

The remaining sections of this publication discuss ways you can ensure that you are buying what you need – even when it is a relatively intangible product such as professional services.


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