Five ways to avoid outsourcing pitfalls

We often find that clients entering the outsourcing market have two primary fears in common: they fear losing control and they fear losing quality. This comes as no surprise whatsoever. Take a group of CEOs whose careers depend upon flexibility and control, and whose reputations depend on quality — any threat to either of these is going to induce almost tangible anxiety.

If we accept that a good relationship with a quality outsourcing partner will negate these apprehensions, we need to look at how to get that relationship right in the first place. Here are just five points that are often undervalued or overlooked, but can get organisations on the road to successful outsourcing partnerships:

1. Communication from the outset…

…is imperative if you want to retain control. There will be prospective partners that know what they are doing so well, they’ll be happy to take over the project completely. For those that seek such a partner, it is heaven-sent. For most, who want to retain as much influence as possible, you’ll want a partner that has set communication channels and procedures in place so that their clients can see, and be involved, at every stage of the project. Your requirements need to be communicated from the outset.

A confident outsource partner will actively encourage its clients to appoint designated person to keep the channels of communication flowing. This encourages the retention of control, ensures optimum communication, and the added benefit of their knowledge base can also help to speed up the development process.

2. Don’t ignore the outcome of other company cases

If your prospective partner is self-assured with his service, he will happily introduce you to other clients, so that they can share their experience honestly and openly. Hearing first hand about your prospective partner’s internal procedures of quality assurance, project management, and ongoing communication from someone who has already outsourced to them is the best way to alleviate fears about loss of quality.

3. Give a lot of thought to your choice of country

There can, at times, be a negative PR association and customer response to outsourcing. One way to mitigate this is to choose your target country carefully. Creating a shortlist of prospective partners and going to visit them at their local offices to see how they work, and gauge how well you’re able to communicate as prospective partners, can be invaluable to choosing the right partner and ensuring positive outcomes for the long term.

Many partners are available in far-flung locations where the labour market allows them to offer a service cheaply and reasonably competently. However, for those leaders who wish to retain control and quality, this project could seem too far to keep within the management’s grasp.

In that case, nearshoring is becoming ever more popular; eastern and southern European countries have a fabulous educational system and an enviable talent pool, are close enough that a face-to-face meeting can be just a couple of hours’ away, and are quite similar in culture to British businesses, people and lifestyle.

This closeness and familiarity can prove a deciding factor for those leaders who like to keep their hands firmly on the steering wheel of their projects.

4. Underestimating the complexity of the tasks that are being outsourced can lead to frustration later down the project line

Most leaders lack the complete understanding and appreciation of how day-to-day work within their organisation is done and how complex it is. It is a common mistake to underestimate how time-consuming and difficult some tasks can really be — even ones that were initially perceived to be relatively simple and straightforward. Choosing the right partner will help a company to recognise the complexities of workflows and raise considerations that need to be taken into account.

When this process is completed to its highest potential, a company can learn a great deal about itself for use in streamlining of processes and systems. This is just one of the beneficial side effects of successful outsourcing.

5. Get your contracts right before you get started

Of course, there will be the usual intricacies involved that will need to be addressed at this stage, such as intellectual property rights, contract length and agreements of return of services should the partnership prove unsuccessful.

However, this is where control and quality can truly be retained — or abdicated if you prefer that route. You are able to dictate how much, or how little, control you wish to relinquish.

Perhaps most important is determining who owns responsibility for the project. Find a company that offers different models — where you can own 100% of the responsibility for outcomes, or some, or none. Outsourcing varies from the simple provision of competencies and people, to complete responsibility ownership — you need to decide what you, and your budget, prefers.

Tell them precisely what you expect from them, and what they can expect from you.

A final word…

As you are shortlisting your prospective partners, look out for those that offer a shorter term test project. In some cases, test periods can be completed within as little as two weeks so garnering an appreciation of projected turnaround timescales in advance is important. This will also help you to find out whether outsourcing is for you, and tell you more about the agility and capacity of the prospective partners you’re considering. If the project then rolls out in full, this initial contact may well prove very beneficial as any initial teething problems are likely to be ironed out more quickly so you can go live with complete confidence.

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