Outsourcing

What are the Challenges of Outsourcing and How to Master Them

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What are the Challenges of Outsourcing and How to Master Them
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What are the Challenges of Outsourcing and How to Master Them

Outsourcing can be really beneficial for your business. If you don’t have the manpower in your organization to do everything you need to do, you need to start looking for outside help. Sometimes it will make sense to bring someone else into the fold but if your resources are limited, outsourcing can be a great alternative.

When you contract out work to a third party there are some common issues you should be aware of so you can avoid them. Charlatans can prey upon businesses looking for outside help and if you’re not careful you could find yourself significantly out of pocket. However, if you have a proper outsourcing program in place you’ll be able to mitigate your risk.

In this article, we will highlight 7 current challenges of outsourcing and what you can do to master them. As long as you have the knowledge to outsource tasks correctly, you should be able to enjoy the benefits that come with doing so.

Problems with Communication

Problems with Communication

One of the most glaring challenges of outsourcing work is communication with a new partner. Your company culture may be set in its ways of operation, as is common with most businesses. However, the freelancer or agency you outsource to will have their own way of working and this may not always align.

For example, you may be based in North America and your outsourcing partner may be based in Europe. It may be company practice to hold a meeting at 9am to discuss the details of the day. A company on the west coast may want to hop on a call but it will be the end of the workday in Europe.

It will be necessary for both companies to make compromises in these instances but an understanding of each other’s work habits will help. Alongside potential issues with time, working with overseas partners can lead to issues with language and understanding. You may think that instructions have been understood but the language barrier may prevent key information from translating.

Working with overseas partners can help to reduce costs as the cost of living varies around the world. If you only have a small budget to work with, working with freelancers abroad may be your only option. However, if you can outsource work to people in your country and timezone, you can tackle communication issues in real-time.

Sharing Intellectual Property

Sharing Intellectual Property

When you outsource to a new company you need to have a lot of faith in their integrity. It may be crucial to share trade secrets, classified information, and the internal workings of your company. Team up with the wrong person and you could see your highly important information sold to your rivals.

It may sound all doom and gloom but thankfully you can usually vet your potential partners before hiring. If you can check reviews or view a list of their other corporate partnerships, you will be able to overcome these kinds of challenges of outsourcing and hire them with confidence. If you are trusting them with confidential customer data and they spill the beans, you could open yourself up to lawsuits.

Team up with a company with a proven track record of working with intellectual property. Make sure that they have protocols in place to protect your data, including safeguards to prevent access to their buildings by unauthorized personnel.

Here’s where the lawyers need to get involved; as well as the work contracts, ensure that legally binding documents are signed to protect your data. You may want to include safeguards such as a non-disclosure agreement that can protect your intellectual property from being shared.

Cultural Differences

There are additional outsourcing challenges that come from cultural differences, whether company culture or regional. Access to the global marketplace is an amazing opportunity to find highly talented partners. You can hire the right person for the job, remotely, from just about anywhere in the world. From a graphic designer in the Philippines to a manufacturer in Japan.

Cultural differences don’t just affect communication but productivity, understanding, delivery times, and much more. If there are mounting misunderstandings it can cause stress for the workers and cause unnecessary friction between the two companies. When dealing with international companies it’s important to be open to new ideas and different working patterns.

Companies will always have different ways of doing things but being flexible can help to foster a healthy relationship. In order to keep things progressing smoothly, you should set clear expectations for things like time frames and deliverables.

One way to overcome these outsourcing challenges is to create a training program for your new partner. This can help to share your company culture with them and the outsourcing company will be able to share this with their in-house teams.

Using customer service as an example, it’s not uncommon for this to be outsourced abroad. Detailed training is shared to ensure the employees at the call center can represent the brand and deal with customers in a different country.

Unprofessional partners

Unprofessional partners

Just like hiring in-house, you can’t really get the measure of someone until they’ve worked with you for a while. You may have felt like the interview went well and you’ve found a winner, the right outsourcing partner. However, their professionalism could start and end with the interview phase.

Okay, so you’ve exchanged contracts, defined expectations, and set the deadline. Now you leave them to their own devices, assured that the work will end up in your inbox on the date requested. But it doesn’t come, so you message them, and they’re slow to respond, then they ask for an extension.

This is beginning to look like a problem. When something like this happens it’s hard to know what to do, you’ve already sunk a significant time investment in this person. It could be affecting the rest of your team, or delay the work you owe a client.

When these kinds of issues arise in-house, there’s ample opportunity to take control and manage the situation. If you’ve outsourced work that you’re unable to do in-house, you end up stuck waiting for results.

To combat this, you should build milestones into the contract, that way you can monitor the progress on a week-by-week basis. You’ll quickly be able to spot a bad player and you can look at terminating the contract early.

Beware of unrealistic offers

A lesson we all have to learn eventually is that if an offer sounds too good to be true, it probably is. $2.99 headphones will probably sound very tinny and break after a single-use. Likewise, hiring someone who is promising the world and charging a fraction may not be able to deliver the quality you want.

Some companies have made it their business to bid on jobs and severely undercut the competition. They’re just looking to make a quick buck and aren’t as invested in your success as you may wish. It’s quite simple really, you get what you pay for and if you want good work you should be willing to pay higher prices.

When you’re dealing with a limited budget, take time to consider each proposal before signing on a partner. Things to take into account are their experience level, where they live, and what the going rate for your project is. Overseas candidates may be able to come in at a lower price because of their cost of living – this is great. Someone in a high cost of living area, charging something unrealistic, may be trying to take advantage of you.

After-sales support

After-sales support

This is a crucial thing to have stipulated in your contract. What happens once the goods have been delivered? Does your outsource partner wash their hands of you or can they offer some form of after-sales support? Ideally, you want to sign on with someone who can offer the latter.

If you hire someone to do some design work for you, you should try to build revisions into the contract. If the work they deliver fails to meet your expectations you can pass it back to them and they’ll rework it. You can build this kind of failsafe into most contracts depending on the kind of work that is being conducted.

Once the job is done and the deliverables have landed on your desk, it may be the first chance you get to look for defects or inconsistencies. If your outsourcing partner doesn’t offer after-sales support you may be stuck with goods that don’t meet your needs.

Outsource companies that specialize in this type of operation will typically have after-sales as a standard. When deciding on who to choose for the work, consider how extensive the after-sales support is.

Your own expectations

Setting unrealistic expectations will only lead to you being disappointed. You may think that paying an outsource company to deal with certain tasks is all you need to do. However, this can lead to the failure of projects and you risk disappointing stakeholders and clients.

You need to set clear expectations with your outsource partner with extensive parameters for the work to be completed. Leave no room for error or interpretation, explain exactly what you want, how you want it done, and when it should be completed by.

Before you exchange contracts, make sure everyone is clear on the deliverables and time expectation for goods to be back at base. As long as expectations are made extremely clear, with no wiggle room, everyone should be on the page.

Conclusion

It may seem like there are a lot of challenges of outsourcing but there are many reasons to partner with a third party. If you need someone to do something you can’t, hiring an outsource partner can be the best thing for you. Just have your wits about you when you start looking into outsourcing and partner with a reputable company.

Remember, if a service sounds too good to be true, it is, and you shouldn’t fall for it. Partnering with the wrong agency can be a massive drain on company finances and lead to delays in projects. Look for a company with good reviews and proven work with other recognizable businesses.

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