We are in the era of outsourcing. It is rare to find any business
that does everything in-house with full-time employees. Everyone outsources to
some degree no matter what they call it including subcontracting, freelancing,
and virtual assistants. The biggest outsourcing mistakes happen like any other
mistake in business. They happen when businesses try something new or when
their staff does not have an adequate training to do what they have to do. These
biggest outsourcing mistakes are no different.
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Poor Team
Management
Contractors, freelancers, and other outsourcing solutions
providers cannot help you manage your business. They can manage their own
internal processes, but they do not have the staff or time for yours as well.
Remember, if you completely rely on managers from your outsourcing vendors,
they, not you, will be managing your company and its objectives. While you
should never over-manage anyone, you need your own management team to keep your
internal and external projects moving forward.
Fixed Price
Bidding
Related to cutting costs, many business owners believe that
they can use fix pricing bidding on everything. Fixed pricing is only an
effective compensation for well-defined short-term projects such as blogging or
programming. You will not get far if you try to use it on call centers, affiliate
marketing vendors, or even data entry. You have to be flexible and do the
necessary research with your peers to check all the alternatives available to
you.
Wrong Mindset
One of the biggest outsourcing mistakes is that companies
tend to use fix pricing on everything because they outsource with the wrong
mindset. They see their remote workers as employees and can be treated like
employees. Other companies see their outsourcing partners as temps, or startup
staff that they can eliminate as they please. But, these abusive RFP processes,
ruthless negotiations, or treating your vendors poorly will only lead to
disaster.
Personality
Mismatch
Business owners tend to outsource without considering the
possible cultural clashes between their in-house people and their remote vendors.
They expect their vendors to adopt their business culture, and their employee
the stress that come with outsourcing. While your vendors will always try to
adapt to your situation, the success of your projects will depend on their
cultural work ethics, time constraints, social status, language quirks, and an
overall attitude. Remember, cultural adaption goes both ways. You have to learn
how to embrace your vendors' cultures as well to establish a mutually
successful business relationship.
Lack of
commitment
You might not think of it as an issue, but not having the
commitment to follow through with your outsourcing endeavors is a disaster
waiting to happen. Changing your projects needs and switching between vendors'
mid-project will lead to defective products, longer development times, and
confusion for everyone. Organizational commitment, executive sponsorship, and
stakeholder buy-in are the keys to any successful initiative.
Outsourcing
for the sake of outsourcing.
The biggest outsourcing mistake is outsourcing for the sake
of outsourcing. That is outsourcing tasks and problems that are better
addressed in-house or through other more effective tools and measures. While
outsourcing is a powerful tool that can help you meet your business goals, you
can abuse it if you are not careful. Outsourcing without caution or appropriate
knowledge can backfire causing irreparable damage to your business and your
reputation.
With modern technology, and worldwide reach, outsourcing
should be an important tool for building your business into the efficient,
lean, and competitive business of your dreams. You just have to avoid the pitfalls
of believing that it is easy and inexpensive. Keep this in mind, and your
efforts will lead to business success instead of failure.
[The author last posted an article for Domain Name Definition: A take from top Domain Name Registration in Pakistan].
The author works for a top Outsourcing IT services in Pakistan.
