3. Pre-determine Incentives and Penalties Schemes.

The provider should be driven to meet established customer expectations or even exceed it by adopting performance based pricing criteria. If performance of service provider exceeds expectations, then incentives should be given; conversely, appropriate penalties should be imposed if objectives are consistently missed.

4. Review Periodically to Maintain Successful Relationships.

Organize formal review meetings often. During meetings, both sides can discuss performance of both teams and determine future objectives or goals of company accordingly. They can also discuss product reviews and deliverables during these meetings. Keep in mind that performance objectives may need to be continually revised according to changing market conditions and opportunity costs of both firms.

5. Communicate Well & Often to Bridge Cultural Differences.

The parties involved in an outsourcing relationship belong to distinct cultures, these differences have to be accepted and bridged. The cultural understanding between two organizations can be enhanced by organizing social events, educating about company background, participating in each othersí quality programs, etc. Communication really is key to a healthy relationship. It may be helpful to send a loyal employee to BPO site for a few months to facilitate understanding in implementation phase.

There are a few disadvantages to outsourcing, however, and you should definitely take those into account as well. For one thing, if you outsource, it means that you're going to have to work very closely with company that you outsource your work to. Otherwise, you won't get finished work as soon as you need it. Having another company involved in your business might get tiresome after a while.

Another thing that you should consider is that depending on where you outsource to, it might hurt your business. This is generally only a big deal if who your customers are really matters, or if you're a very small business. Some people shop at small businesses because they're local - and if you're a business like that, then outsourcing might be to your disadvantage.

In end, however, question of whether or not outsourcing is right for your business can only be answered by you.