BPO - Decide what functions to outsource

Begin by defining, in clear terms, the strengths and weaknesses of your business. Keep your strengths in-house, and farm out your weaknesses. Next, break down business projects into sub-projects, says Atul Vashishtha, chief executive officer of NeoIT, a San Ramon, Calif., outsourcing consulting company.

One of his clients, for example, had to build a new Web site. The client knew it was good at design but probably needed some help with programming. By divvying up what it did well and what its Indian vendor could do better and more efficiently, the client managed to save 60% on the cost of the project.