Outsourcing – risks and obstacles – 1

June 16, 2021
Customer services

Outsourcing, by nature is a low-risk and high reward transaction, only if you planned it after a careful thought and investigation. It’s a low risk one because you can always test with a small order and seek samples before you outsource to a vendor. If you are using well known outsourcing and product sourcing platforms, you can look at reviews and ratings before you can recruit your partner. Companies have varying experiences from their outsourcing endeavours, ranging from dreary disappointments to outstanding success. You may be inclined to believe what you wanted to hear, but here are the few factors that you can use to refine your decision to outsource or not

Trust: Like any other business transaction or relation, trust is a major factor when you want to outsource. The outsourcing agency may be highly competent, but if you cannot create an environment of trust and mutual respect, you may not be going too far with your partner. This applies to your agency partner as well, if they couldn’t win your trust, you better look at alternatives. Trust is beyond signed agreements, because you and your outsourcing agency are operating from different geographical areas under different regulatory authorities. It’s very important to talk to your partners and find out if they are what you are really needed. If yes, try to understand them better and find out how you can create a good relationship with them.

Quality:  Quality is often the most discussed part in the outsourcing business, because this is something that comes into picture only after you have commissioned a project got some output. Many times, quality is hard to define. It could be because you have an idea, but don’t have the vocabulary to describe your idea. You feel it, but you can’t define it. Even if you define, it is possible that you are unable to convey it to the other party, or it is lost in the translation. This is where you need to list out similar products and write down your ideas to the last detail. It is your responsibility that the developer at the other end is able to understand what you are trying to say. Some outsourcing projects fail simply because everybody seems to have understood what they need to do as per their last conversation, but no one cared to put down their thoughts and imagery on to a paper and shared it to the other party to confirm if it is what they really meant!

The downside of it is that quality is expensive in most cases. You can’t expect top quality output at the meagre prices you are willing to pay, even with outsourcing. So, you have to find a reasonable trade-off between what you pay and the quality you are expecting

Cost:  Cost is the obvious reason why many choose outsourcing.  The direct cost benefits produce the real value only if the desired business goals are achieved. If projects ran for a long-time or the desired output is not produced, your outsourcing is not generating you the value. There are a lot of factors you can take into consideration. Do a comparative study of service providers from different regions. Look at their price variations and guess what the defining factors for their pricing are. Mostly it’s the experience, expertise, success rate, in-demand skills and communication skills that determine the price of a service. The origin of service is also a huge factor, because freelancers from some countries come at a cheap price because of their living standards. You have to compare the skills of freelancers from different regions and see the variations in their hourly wages to choose the right talent at the desired price.

In the next part, we will discuss about some more risks…