Keeping business knowledge in-house when work is outsourced

Key takeaways

Knowledge retention in outsourcing means making sure your business, not the provider, holds the knowledge of how work is done. Keep three things in your own hands: the written process guides, the data and the system access. With those, you can change provider or bring work back. Without them, you are dependent.

• Own three things: process guides, data and system access.
• Keep one in-house person able to explain each outsourced process.
• Review the guides quarterly and after every change.
• Put ownership and handover duties in the contract.

What knowledge is at risk?

The knowledge at risk is the practical kind: how exceptions are handled, why a rule exists, which customers need special treatment, where the awkward data sits. Once a provider has run a process for a year, its people know these things and your own may not. That is the knowledge to capture.

• How outsourcing helps small businesses scale without hiring
• The cost of undocumented processes

Is knowledge safer in-house anyway?

Not automatically. In many small businesses, process knowledge sits in one employee's head, with nothing written down. When that person leaves, it goes with them. Outsourcing forces documentation, which often leaves the business better protected than before, provided it keeps the documents.

• Key person dependency: when one person holds it all

How do you keep the knowledge?

Keep the knowledge by owning the artefacts and staying involved. Store process guides in your own shared drive. Hold administrator rights to every system. Have the provider record changes and new exception rules in the guide as they arise. Keep one in-house person close enough to explain the process to a newcomer.

• Guides stored in your own document system.
• Administrator access held by your business.
• A change log maintained in the guide.
• A named in-house process owner.
• A quarterly walk-through of each process.

• Document your processes before you outsource
• What your in-house team should do once work is outsourced

What should the contract say?

The contract should say that documentation created for your work belongs to you, that your data is returned or deleted at the end, and that the provider will support a handover for an agreed period. UK GDPR already requires processor contracts to cover return or deletion of personal data when the service ends.

• BPO contract terms to check before signing
• Data processing agreements for outsourcing

How do you test that you still hold it?

Test it once or twice a year. Ask an in-house person who does not normally do the task to complete five cases using only the written guide. If they can, the knowledge is retained. If they get stuck, the gaps they find are exactly what needs adding to the guide.

• Cross-training a small team: more cover without hiring

When is some dependence acceptable?

Some dependence is acceptable for specialist work you never intend to do yourself, such as payroll processing or statutory accounts. There you rely on the provider's expertise by design. The aim is not to be able to do everything, but to be able to move the work and understand what you are buying.

• Outsourcing lock-in: how to scale without getting trapped

What does this look like in practice?

A pattern we see when UK firms review an older outsourcing arrangement: the only current process guide is on the provider's system, and logins were created under the provider's email addresses. Nothing has gone wrong, but changing anything would be difficult. Moving the guide and the accounts into the client's name takes a few days and removes the risk.

• See client work
• BPO Solutions for UK businesses

Knowledge retention checklist

Check these every six months.

• Process guides stored where you control them.
• Guides updated within the last quarter.
• System accounts registered to your business.
• A named in-house owner for each process.
• A guide-only test completed this year.
• Contract terms on documentation, data and handover.

• Switching BPO provider without losing service
• Business continuity for outsourced operations

Next step

Tell us which processes are outsourced or about to be. We will help you check where the knowledge sits and what to bring into your own hands.