Outsourcing Mistakes That Businesses Make
Outsourcing can be the perfect way to cut costs, expand capacity, and tap into outside knowledge, particularly when there is a need for specialised skills. However, when done without proper planning and consideration the results can be underwhelming at best and on occasions disastrous.
To make the most of outsourcing opportunities, it is wise to be aware of the common mistakes that businesses make when engaging outsourcing companies.
Here are seven of the biggest and most common outsourcing mistakes, and how to avoid them:
- Not setting clear parameters and guidelines.Outsourcing won’t work effectively without defining procedures and rules around a process or task. For some reason, many companies don’t see the need to communicate guidelines or rules to outsourcers. While many businesses get away with unwritten rules and procedures in-house, the risk is too great when outsourcing work. Everything needs to be written down in clear language and agreed to.
- Over-estimating cost reductions. Outsourcing tasks will almost always result in cost reductions, but there are some costs that you may not factor in with your enthusiasm to cut costs. These include time costs involved in monitoring performance, giving feedback and building relationship.
Similarly, accepting the lowest possible quote can result in short-term gains and long-term cost overruns. You get what you pay for when it comes to outsourcing. A low quote may have hidden costs attached.
- Not measuring output. Its very nature demands that outsourcing takes procedures off site and possibly out of sight. If no clear measurement parameters are in place the processes are in danger of becoming invisible. It’s imperative that you decide upon methods to measure performance to agreed standard. Those measurements must be tracked and analysed to ensure that your standards are being met.
- Poor cultural fit. There’s nothing worse than having business partners who don’t have the same core values, ethics and focus that you do. Clear communication of expectations, goals and values at the initial stages of an outsourcing relationship can help you to identify whether the prospective outsourcer is a good fit for your company.
- Poor communication strategies.Barriers to communication between you and the outsourcer can be such things as distance and time differences.Language difficulties and cultural differences can also make communication difficult. These impediments can be overcome by selecting the right outsourcer from the outset and engaging in agreed communication protocols.
- Seeing outsourcing as a quick fix instant solution. Using outsourcing to alleviate immediate problems is fraught with danger. Lack of preparation and due consideration to organisational aspects, communication, measurement and overall costs can create as many problems as you are seeking to fix. Preparation for a transition to outsourcing is critical if it is going to be effective.
- Poor Initial evaluation of outsourcing providers.Finding the right outsourcing provider demands that a proper selection process is undertaken and outsourcers are evaluated on their merits and ability to deliver on the key areas that you need.
Outsourcing provides many benefits to companies prepared to adopt the model. However, to realise the potential of outsourcing, companies must take into account these critical factors to ensure the best possible result.
At ASTIA we understand the importance of finding the right outsourcing partner for your business. Learn why so many Australian businesses have chosen ASTIA as their contact centre - call us today on 02 8379 7834