March 2


10 Common Outsourcing Pitfalls Businesses Should Avoid

By Global Strategic

March 2, 2018

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Outsourcing has been embraced by many businesses across the globe, spanning every industry type and company size. Most benefits of outsourcing are well known and include (but aren’t limited to) cost savings, improved efficiency and productivity increases. Business process outsourcing has been proven to be a valuable consideration in the modern workplace and has assisted many companies in achieving their goals.

10 Common Outsourcing Pitfalls Businesses Should Avoid

However, this doesn’t stop us from hearing outsourcing horror stories from those who tried and failed. These stories range from missed deadlines to poor quality to losing a client altogether. Instead of saving costs, outsourcing mistakes can lead to loss of profits and even business failure.

So before you start your outsourcing journey, consider these common mistakes that every business owner should avoid at all cost.

  • Too much excitement. Some businesses are too eager to offload their work to their outsourcing partner without first understanding the intricacies of the relationship. Jumping in too quickly could lead to a disaster so take it slow before entrusting the whole project to a third party without having the appropriate requirements gathering and process mapping with your outsourcing partner first.
  • Failing to provide guidance. You want to hire an outsourcing partner who has experience and the technical skills to get the work done. But you can’t just dump the work without explaining what you want done or what your goals are. Take the time to create guidelines, procedures and rules to be implemented for any outsourced work. And don’t forget to put them into writing. Much like anything else in life- the better quality of input, the higher value of output.
  • Dealing with your customers.  Don’t let people who are not familiar with your business handle the sensitive task of resolving complaints or dealing with customer problems without first providing the appropriate knowledge and training. Your customers expect and deserve a personal touch from people who know about the business. If you expect to outsource client communication, you need to ensure that you have worked with your partner to build and familiarize them on your appropriate operating procedure and escalation channels.
  • Working with non-English speakers. Imagine having a non-English speaker transcribe a video or an audio in English. You can only expect errors and misspellings due to the gap in communication. Outsourcing in the Philippines has become popular because aside from having a diverse range of skill sets, Filipinos are also good English speakers.
  • Overestimating cost savings. Outsourcing solutions do save you some expenses and free up most of your hours but not on an exaggerated level. Remember you also have to invest in monitoring the project and spend time measuring the performance. Ideally, outsourcing can provide you 50% to 70% cost savings.
  • You get what you pay for. Going for the lowest bid is a huge mistake because quality is generally associated with the price. If you get lucky and you get quality work for the lowest price, then good for you. But that’s not usually the case. Don’t be afraid to pay a little extra if that means you’ll get exactly what you want.
  • Not measuring performance. Outsourcing means taking processes out of your sight and you have no idea how your project is proceeding. Although trust is an important factor in an outsourcing relationship, it doesn’t hurt to implement measurement standards to ensure the quality of the output. If clear expectations are defined and agreed upon prior to engaging a provider, your chances of success will greatly improve.
  • Outsourcing everything. Although outsourcing has a lot of benefits, it is not good to offload everything that comes to your desk. Remember that some core processes should stay in-house.
  • No improvement strategy. Do you have a concrete plan for every “what if” situation? What would you do if your standards have not been met or the outsourcing hasn’t been what you expected? You should have a solid improvement strategy when things are not going as planned and need to be remedied.

Smart outsourcing means spending more time on the business rather than in the business. By knowing these mistakes, you will be more confident in offloading your work and maximizing the benefits outsourcing has to offer.