Solving the “management case” in outsourcing

Businesses may have different reasons why they decide to outsource some services or projects, and most of the time, they have a clear idea of why they need outsourced teams. That is a great headstart, but most of the time they don’t consider how they are going to manage or get confused about how the relationship works.

Some companies analyze the benefits and drawbacks of outsourced teams and decide solely on that, ignoring the management side of outsourcing. When it comes to negotiating the level of control, they might feel like outsourcing is not for them. We want to save you that hassle by discussing how usual relationships deal with management and performance.

In this article, we will show you what aspects of outsourcing teams you can manage and also share some best practices for the relationship management to work smoothly.

What are outsourced teams?

Outsourced teams are external teams of professionals hired to perform specific functions or to take over projects for a company. They can be hired for seasonal projects, or they can be part of a long-term collaboration. These teams stand out because they bring experience and skills that could take years to develop in-house. 

Their uncomplicated integration nature and low costs attached make them the best solution for companies looking to offer new services or those who want to launch a project but don’t have enough time for it. 

Outsourcing teams usually work remotely and have 3 different models to offer: Onshore, Nearshore, and Offshore. Each has its own set of benefits and challenges, so it's up to the hiring company to decide what type of outsourcing model works best for them. Those models make outsourcing widely accepted. Around 66% of US companies use outsourcing in some form, with IT services accounting for roughly 72% of the market. Even small businesses rely on it, with 37% outsourcing at least one function to stay competitive.

Usually, when companies hire an outsourced team, they are looking for professionals who can overtake roles such as software engineering, IT support, customer service, SaaS, finance, or back office operations. 

Benefits of Outsourced Teams

Frees up time for your in-house team

Outsourced teams come in handy for routine and repetitive tasks (even highly specialized ones) that take time off your internal teams. Take into consideration that these tasks are important, yet they take too much time that could be used on other higher priority ones. This benefit commonly stays underappreciated because some companies focus solely on cost savings.

A strategic way to offer more services

Commonly, one of the main reasons why companies hire outsourced teams is that they want to offer new services to satisfy their customers’ needs. But sometimes they encounter challenges like high costs, small infrastructure, or a lack of expertise. When in need, companies can hire outsourced teams as a strategic move to offer new services.

Access to global talent pools

Imagine having a large amount of professional talent at your disposal so you can hire them whenever you need them. Well, outsourced vendors have access to professionals with various skillsets ready to start working. It doesn’t matter your location; they have contacts and access to people from any region, making it a competitive move.

24/7 operational coverage

A big challenge some companies face is offering 24/7 support coverage or simply maintaining operations that way. Time zones play a critical role here, and if you don’t have enough budget to hire people in your same region to do this, then hiring outsourced teams is your best option. It also benefits if you have international customers, so they can interact with your business at any given moment.

Significant cost savings

Outsourcing typically reduces costs by 30–50% on average, especially on recruitment, training, employee benefits, and infrastructure. The savings it provides are usually the most common reason why businesses decide to outsource.

How to manage outsourced teams?

The hiring company doesn’t have to be in charge of everything when managing outsourced teams. If not, you will add unnecessary layers of complexity to the relationship when it is meant to make your life easier. Let’s dive into the management aspects of outsourcing and the responsibilities of the hiring party.

Communication 

Like every other relationship, communication plays a key role in outsourcing. When it comes to managing outsourced teams, you need to collaborate with the outsourced vendor to define how communication will work. Among the best practices for managing outsourced support team communication are: Structuring channels, defining how often meetings will be necessary, setting the documentation, and establishing training topics focused on communication.

Strong communication is vital, and studies show that better communication can improve productivity by up to 25%, and teams that feel informed are far more engaged. Once defined how communication works, you set the roles you need and the team’s hierarchy, having a POC between the vendor and your company.

Performance

Performance needs to be tracked to measure the team’s outcomes and how they are truly adding value to your business and customers. KPIs, shared dashboards, and regular feedback loops create accountability and continuous improvement. Clear metrics increase efficiency by 22% on average, especially when teams understand how their output is measured.

Evaluating performance will allow both parties to understand how to move forward and what action items must be taken depending on performance. Your job is to define these metrics with the vendor at the beginning of the relationship.

Working hours

Based on your needs, one of the main things that will be defined is the working hours the team must fulfill. Hiring plays a vital role in this; to avoid burnout, you must collaborate with the vendor, so it’s your responsibility to manage this with them. When time-sensitive matters show you both need to manage them to maintain high satisfaction rates.

Equipment and tools they’ll work with 

Usually, your company doesn’t have to provide the equipment or tools for the outsourced team, so it's technically not under your management responsibility. Still, this is something you need to be a part of to make sure everything stays on budget, and if there’s any specific tool you need, then you and the vendor must manage how it is implemented. Make sure they align with your needs so everything follows your quality standards. 

Remote guidelines 

Outsourced relationships need structure and understanding of your company’s policies to perform accordingly. It is up to you to ensure your policies and guidelines are up-to-date and legally correct. Standard operating procedures, productivity expectations, and cybersecurity rules must be clearly documented. Your part also includes defining clear expectations to avoid misunderstandings.

Conflict management

No one is safe from conflict, so it is your responsibility to manage how conflict is handled in your company and share your guidelines with the outsourced vendor. Defined escalation paths, mediation processes, and proactive team-building activities reduce friction before it affects delivery. You shouldn’t leave the outsourced team to figure it out on their own; be part of it to calm situations when needed.

Data security

Security is non-negotiable for every company, and you need to collaborate with the vendor to define security measures. NDAs, regular audits, encryption, and compliance training protect company data and customer trust. This is especially critical when outsourced teams handle sensitive systems or personal information.

Best practices for managing remote outsourced teams

outsourced teams best practices

1. Search for potential partners. The first step for a successful outsourcing relationship is to take your time to search for potential partners. We don’t mean quick scanning through websites and fast scrolling; we actually mean that you must take your time in analyzing their offers, pricing, reviews, and culture. Then you must start meeting with those who fit your needs to select your desired vendor.

2. Set clear expectations from the beginning. Contracts should define scope, SLAs, escalation paths, and success metrics. Milestone-based roadmaps help define what success looks like and how every party will handle management and responsibilities. Clear expectations eliminate most management problems before they start.

3. Train the team on the company’s policies. Training ensures a deep understanding and ensures that both sides are aligned. Structured training improves consistency and reduces errors early on. Training must be managed by both parties, where topics and the best strategies to share the needed knowledge are discussed.

4. Onboard the team and provide access. Strong onboarding matters more than you may think; having a clear strategy ensures success early on. Studies show that structured onboarding programs increase loyalty, and up to 58% of employees stay with a company that has strong onboarding. The answer to how businesses integrate outsourced teams with internal processes starts with a personalized onboarding strategy.

5. Clearly define communication channels. A clear communication strategy looks like this: Slack for daily communication, Zoom for weekly live meetings, and Jira updates for progress tracking. A great work from the beginning defines the responsibilities of managing the relationship.

6. Measure performance. Metrics, retrospectives, and automated reporting tools keep performance visible. This is one of the most effective best practices for managing remote outsourced teams and ensures alignment with business goals.

7. Make sure they feel part of the team. Professionals who feel valued are 4.6 times more likely to stay. Managing this aspect is a shared responsibility to make sure employees feel an integral part of the business, giving them a sense of ownership. Instead of isolating them, make sure they feel included in your strategies.
8. Foster a culture of continuous improvement. Regular feedback, upskilling initiatives, and process refinement keep outsourced teams aligned with evolving business needs. Improvement should be systematic, not reactive. If this is already part of your organization, then you must ensure that this cultural aspect is transferred down to the outsourced team.

Tips for integrating outsourced and in-house teams

Train them on the company’s culture

The best way to manage an outsourced team is to involve them in your own culture in a way that they can make decisions and own their responsibilities. Training ensures that they have enough knowledge to perform on their own, avoiding tedious micromanaging.

Onboard them on the team’s workflows and software

Another strategy to avoid micromanaging and enhance performance is to make sure the team is involved in the company’s workflows and software. Making sure they understand them will give them the chance to suggest improvements and identify optimization opportunities. Without proper involvement, you’ll need to manage them directly, reducing trust, which will in turn lead to burnout.

Clearly define leadership 

The best way to define management and responsibilities is by clearly setting up a hierarchy for the teams. This way, they know who to contact when having trouble or when they have questions. 

Align goals from the beginning

Shared OKRs, joint planning sessions, and transparent priorities align incentives across teams.  This is one of the most effective strategies for integrating outsourced and in-house teams. When your team understands your strategic goals and your customers’ needs, they will know the best course of action for your services.

Foster collaboration

Fostering collaboration stands among the best strategies for integrating outsourced and in-house teams. The whole relationship is based on collaboration instead of making them feel constantly supervised. The team and the outsourced vendor POC need to be part of the planning and suggestion process if you truly want the relationship to succeed. This makes them feel part of your own team instead of being castaways, boosting productivity.

Measuring performance for outsourced teams

Measuring performance brings a full-circle sense to the storytelling, as you can actually use metrics to understand the ROI behind outsourcing. Now, you may be asking yourself how companies evaluate performance of outsourced teams? 
Well, they do by tracking KPIs such as on-time delivery, quality scores, utilization rates, and customer satisfaction, which can be measured using tools like Jira, Tableau, or similar dashboards. By defining and tracking those metrics, you can understand the impact of the outsourced teams behind plain numbers.

Bi-weekly reviews, 360-degree feedback, and efficiency audits allow for proactive course correction, and having clear metrics to evaluate during those meetings does more than track output. They create alignment, improve efficiency, and reinforce accountability across all teams involved.

Managing the responsibilities the correct way

If there’s something we want you to keep from this article is that the entire outsourcing relationship is based on collaboration. You should not work alone when deciding, that’s why you hired an outsourced vendor to help you manage your team. Every change, optimization, and news should be discussed between both sides. 

Make sure you both understand the responsibilities and how you will be measuring performance when managing the relationship. Define expectations and have clear communication to ensure a successful outsourcing strategy.
At Horatio, we make sure our customers and potential customers trust us to collaborate with them in finding the best team and managing it together. Contact us and let's start working on creating a successful relationship, tailored to supply your business and customers’ needs.

Key Takeaways

• Shift from vendor to partner: Don't view outsourcing as a hands-off transaction. Success relies on a collaborative management model where you and the vendor share responsibility for integration, culture, and high-level strategy.
• Establish "North Star" metrics early: Proactive management requires clear KPIs and SLAs from day one. Implementing shared dashboards and regular feedback loops can increase efficiency by an average of 22% by ensuring everyone knows exactly how success is measured.
• Prioritize a culture-first onboarding: Integration shouldn't be an afterthought. Treating outsourced professionals as an extension of your in-house team, complete with cultural training and access to internal workflows, drastically improves loyalty and output.
• Architect your communication: Use a structured hierarchy with defined Points of Contact (POCs) and specific channels (e.g., Slack for daily updates, Jira for progress) to boost productivity by up to 25%.
• Built-In security and conflict guardrails: Governance is non-negotiable. Establish clear Standard Operating Procedures (SOPs), data encryption protocols, and escalation paths early to prevent minor frictions from becoming operational roadblocks.