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Outsourcing Blunders to Avoid – What to Watch Out For

Outsourcing Blunders To Avoid – What To Watch Out For

A business in its infancy must be carefully monitored.  Many successful business owners are hands-on, especially in the early years.  The hours can be long and you may not even realize how much time you spend wearing several hats as an accountant, customer service representative, telemarketing, and account manager (among many other roles). When the company expands, however, the dynamics change.  Tasks can get overwhelming even for large teams — making it tough to complete work in each area. The solution, as you may have guessed, is outsourcing with a third-party service provider.  You unload some tasks and allow decision-makers to focus on the issues that deserve undivided attention.

Outsourcing is a huge advantage

Outsourcing is almost synonymous with cost savings, enhanced flexibility, enhanced efficiency, and access to specialist personnel. In addition, a third-party provider makes it a breeze to streamline operations and stay ahead of the competition.

However, first-time outsourcers are likely to make outsourcing blunders.

If you’re just getting started with outsourcing, take note of these top outsourcing mistakes.

MISTAKE #1: Not understanding what to outsource and not having defined goals.

Have a sound game plan in place before engaging the services of a business process outsourcing partner.  It sounds instinctive, but many firms overlook this aspect.  Have everyone on the same page and maintain a clear grasp of which business functions you want outsourced.

Clearly defined goals, objectives, and expectations from the get-go help you and your outsourcing partner align and develop a strong foundation for cooperation. This also prevents “miscommunication”, disagreements, and disappointment down the line. This step, though simple, is the most crucial.  Pause, focus, and be clear by describing your expectations including your objectives, deliverables, and performance indicators.

MISTAKE #2: Ignoring cultural differences

Cultural differences may have a substantial influence on the success of an outsourced project. Failure to appreciate these distinctions may lead to hurt feelings, disputes, lack of trust, and low morale.

If you’ve identified a third-party outsourcing provider, be sure to disclose ahead of time aspects of your company’s culture, communication style, work ethic, and time zones. Allow them time to grasp and respect your cultural peculiarities in order to develop good teamwork. 

MISTAKE #3: Failure to pay attention to contract terms

The adage, “Never sign a contract unless you fully understand what it entails” applies in every outsourcing agreement.

The outsourcing contract is a critical agreement that binds the whole outsourced partnership.  Know the fine print as it describes terms and conditions.  Further, your contract functions as a road map for both parties to achieve outsourcing success.

Failure to comprehend essential factors such as service-level agreements, pricing structures, intellectual property rights, and termination provisions might result in unexpected expenditures and damage down the line.

MISTAKE #4: Poor Project Management

Trust is paramount. While it is true that when you outsource a certain company function, you may trust that they will perform a better job, it is still critical to keep a close watch on operations.  Why? Simply because neglecting to monitor progress, assess work, and offer comments might put your company in danger.

Clients must always remain “involved” even if their offshore partner possesses the necessary skills and competence.  If you find yourself in a situation where you aren’t getting any updates or deliverables from their end, something is amiss.

MISTAKE #5: Unrealistic Cost Assumptions

Cost-cutting is often a deciding element in outsourcing choices. However, concentrating simply on cost without evaluating the quality of work supplied may be a costly (and irreversible) error.

While cost-effectiveness is vital, assessing the quality you will get from that particular collaboration is critical. Setting unreasonable cost assumptions might lead to poor-quality output and substandard results.

Instead, identify the sweet spot where cost and quality intersect and establish a balance. Also, keep in mind the long-term benefits your outsourcing partner might provide to your firm. 

MISTAKE #6: Failure to evaluate outcomes

As a business owner, evaluating the service and results that your company receives is a must.  Don’t do without it.

Are you receiving the degree of service you anticipated? Are you on track with your objectives? Can your BPO partner assist you in determining if the supplied service or results meet or fall short of your expectations?

Don’t be reluctant to communicate your problems. Identify areas that need improvement, and collaborate to develop feasible solutions with your outsourcing partner.  Trust your instincts and allow your analysis to lead you in making sound judgments. 

MISTAKE #7: Failure to create relationships

Viewing outsourcing as just a transactional contract without engaging in relationship development may stifle cooperation and long-term success. This may eventually lead to lost chances and unsatisfactory results.  When you partner with a BPO, view the relationship as similar to sowing seeds.   Begin the relationship with honesty and trust.  Eventually, this will lead to productive collaborations.

By putting time and effort into developing connections, you provide a solid basis for trust, mutual understanding, and successful communication. You pave the path for improved cooperation, problem-solving, and goal and strategy alignment.

Stand out from your competition by aligning yourself with a BPO partner you can trust.

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