Many times companies outsource their work to reduce cost or increase work efficiency without actually taking the time to select the vendor. And this is the major issue which results in project failure or cost overrun. You need to take your time and prepare vendor selection criteria to make sure you select a good outsourcing company.
First thing first you need to start by doing proper research. You wouldn’t go to a shop and just buy a washing machine. Obviously, at first, you would do some research, check the price and features offered by different brands, you might also check for reviews and durability. Only after you have done proper research you go and buy a washing machine.

Similarly while selecting outsourcing or a staff augmentation vendor you should do some research, find their price and service offered, check for the review and work experience. Then select an outsourcing company which you find promising.
To make this easy for you here are the five vendor selection criteria to consider while appointing an outsourcing company:
1. Based on your project’s technical requirement
First thing you need to do is consider your project’s requirement. You need to filter the outsourcing company on the basis of this. For instance, say you want custom software development built then search for the outsourcing company which specializes in software development rather than the outsourcing company working on blockchain. Technology and software development is a broad topic but you need individuals with expertise in a certain aspect. So, it’s best to filter out your list of vendor with your requirements.
Even more, you can go for a staff augmentation vendor as per your technical requirement. Staff augmentation is quite similar to an outsourcing strategy used to staff a project to fulfill business objectives. A model consists of evaluating the existing staff and then determining which additional skills are required.
2. Based on pricing

Now that you have a list of suitable vendors to work with, you can start looking at the price offered by each of them. But remember you shouldn’t just pick a company with the lowest price. Think about the quality too. You can find an unimaginably cheap outsourcing company. But don’t be surprised when their work quality is also unimaginably cheap.
From my personal experience, it’s better to choose a mid-priced level outsourcing company. They tend to provide quality service at a reasonable price. Plus, they are trying to make their way up to high-end agency so they don’t show any negligence and work smart.
3. Based on experience
One of the major vendor selection criteria is the past work experience of the company. The company with past work experience in a similar project like yours can quickly understand your requirement and also have a clear idea about what needs to be done.
It’s so much easier to work with them than a fresher or company with no experience in a project like yours. So, you should also check if they have the necessary technology infrastructure or not. If they have past experience and infrastructure in place then you should contact or reach out to the companies with whom they worked and ask for feedback and review. They can tell you everything about them. And based on that you can decide whether they are worthy or not.
4. Based on the team’s credibility

Many times company focus on the experience and credibility of the outsourcing company and completely forget about the team members of the company. The team members of the outsourcing company should be equally experienced and familiar with your project.
You should discuss your project with them and get their input on your requirement. This helps you decide whether or not they understand your requirements.
5. Based on communication
Another important vendor selection criteria are their communication skill. You can determine their communication skill based on the interaction you had with them.
Are they transparent with their work process? How about the work culture? Is the language barrier making it hard to communicate? How about the time difference? Is it too much?
Well, consider all this factor and their management skills to finally select an outsourcing vendor.