Biggest Outsourcing Pitfalls: What Are They and How to Avoid Them
Businesses work with outsourcing companies for various reasons and advantages. For instance, working with outsourcing service providers allows business owners to focus on core business processes.
Outsourcing has also become a growth strategy for most organisations across industries, enabling them to complete tasks promptly, ensure profitability, and increase organisational efficiency and productivity.
Indeed, outsourcing allows businesses to address different operational issues. However, outsourcing will only work if both parties participate collaboratively with an awareness of the common mistakes to look out for. This post will discuss some of the biggest outsourcing pitfalls and how you can avoid them.
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Not clearly defining expectations
Some business owners fail to outline their expectations to their offshore team. This can lead to productivity issues, inefficiencies, and can affect the overall performance of the team.
Solution: Defining your expectations and goals is beneficial for both your business and your outsourced team. You must identify what is expected of them, the tasks required for the project, the timeframe for delivering the outputs, and how the services are to be performed.
By setting and clarifying your expectations and objectives, it will be easier for you to communicate specific instructions with your remote team and evaluate if they are meeting your expectations or not.
Photo Credit: Jason Goodman via Unsplash -
Failing to provide training for your offshore team
If you view outsourcing as a one-time contract, you may let remote staff training take a back seat.
Solution: When working with an outsourced team, keep in mind that training them will help your company reach its business goals. Therefore, make sure to supplement their knowledge with the appropriate training according to your processes. This way, you get better results from your outsourced team.
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Leaving your offshore team to do tasks without proper guidance
Offshore teams are experts at what they do, but nobody knows your business better than you do.
Solution: Provide them with an operational guide or manual describing your organisation’s standard operating procedures (SOPs). This will help ensure there is alignment between how they execute their tasks and what type of output you expect. If you do not have SOPs in place, optidocs can assist in helping you build your business documentations.
Remember to guide your remote team through your internal processes so they can see where their services fit into the bigger picture. This will help avoid delays and mistakes that could lead to cost overruns and lost profits.
Also Read: A Visual Guide to Strategic Outsourcing -
Not measuring team performance
Team members, in-house or remote, need to meet expectations and produce accurate results. One way to assess whether the members are keeping up with the pace is to conduct a team performance audit.
Solution: A performance evaluation allows you to identify areas of work that need improvement. It also enables you to boost your outsourced team’s performance and strengthen the collaboration among the members. In addition, the evaluation results can guide you on the steps to take moving forward.
Unfortunately, some businesses fail to include this in their checklist. In turn, they end up compromising work quality, which negatively affects their reputation and integrity.
When managing your outsourced team, remind them that the project entails collaboration. Explain to them the need to determine whether someone is delivering their fair share of tasks through a performance evaluation. If someone is lagging, make adjustments to meet team goals. When everyone is aligned, the team can function more effectively.
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Failing to anticipate other expenditures
One of the biggest outsourcing pitfalls for businesses is miscalculating offshore expenses. This results in a bad cash flow, affecting the company’s overall financial plan. As a business owner, you want your outsourcing venture to produce positive results, especially in revenue generation.
Solution: Before getting into outsourcing, you should have a base knowledge of the costs you will incur throughout the process. Remember to discuss the payment terms with your outsourcing partner and clearly define which parts of the service are charged.
It is possible to have additional expenditures that were not part of the original contract, as your outsourcing partner is likely to adjust to unexpected changes as they happen. Having this in mind from the get-go will better prepare you for what to expect expenses-wise.
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Not having a growth plan for your offshore team
Companies that do not have a growth plan for their offshore team can miss out the opportunity for greater success. These organisations may be prone to having a high turnover rate and dissatisfied outsourced employees because of a lack of support for their remote staff. They are also more likely to incur increased hiring and onboarding costs as a result of the high turnover rate.
Hiring an offshore team is more than a contract. Often, it evolves into a long-term partnership.
Solution: Investing time in training and developing your offshore team gives them the necessary tools and skills to deliver their tasks and allows them to perform above and beyond what is expected of them.
The real value of having an offshore team is making them an integral part of your company and helping them grow with you as you expand your business.
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Providing unsatisfactory compensation
Providing inadequate compensation is a sure way to lose your outsourcing team.
Solution: Outsourcing provider helps you recruit the best possible professional that fits your requirement, which is why you should compensate them for their specialised skills based on labour standards. Otherwise, you invite unhappy employees and poor performance into your organisation.
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Not managing data security and confidentiality
Protecting customers’ information is a standard protocol in the BPO industry. However, some companies overlook this aspect of security and operate under loose confidentiality measures and policies. By doing this, they risk exposing important data to a potential breach.
Instances of data breach and leakage can have serious consequences for a company, such as revenue loss, operational disruption, regulatory sanctions, and reputational damage, to name a few.
Solution: When working with an outsourcing provider, remember that you will be exchanging highly confidential information like financial data, employee files, and payroll reports with your offshore team. Be sure to be vigilant about protecting your confidential files and look for an outsourcing provider that values data security and handles potential risks.
Awareness Helps You Avoid Making Outsourcing Mistakes
The whole outsourcing process entails getting to know your outsourcing partner and seeing if they are the right fit for your business.
After signing the contract, the goal is to communicate effectively with your offshore team to ensure that all expectations are met. Remember that training your remote staff and providing them with growth opportunities will encourage them to deliver better results, which, in turn, improves your business productivity and profitability.
If you are looking for a reliable outsourcing partner with a proven track record in delivering quality services, consider working with optiBPO. We continue to play a role in shaping BPO in the Philippines as we employ processes that comply with industry standards and use strategic approaches in recruiting the right offshore team for businesses. Talk to us today to learn more about our services!
