The best and worst ways to consider outsourcing your projects.
While there are several benefits to outsourcing, there are also several things to watch out for to avoid outsourcing disaster.
Outsourcing can prove to be the most cost effective and time saving factor for your business. If chosen well it will turn out to be the best business decision you ever made, else it might just turn out to be the worst idea. The service provider you select and the way you employ their services will be a deciding factor in how effective outsourcing is for your business.
Well, let’s say with all the wise counsel you can gather in the world, you end up choosing the most effective and worthy service provider to outsource. Things can go wrong from that point on too. However, relationships are difficult to maintain and that applies to nearly every kind of relationship. Anything can go wrong. Because everyone puts their best feet forward in the beginning.
Keep an eye out and be watchful for these warning signs when you have outsourced, could help you salvage your business.
Unclear and Untimely Communication
The success of your outsourcing project is dependent on clear and direct communication. Regular update meetings, phone calls and if required video conferencing is an absolute must. However answered mails, repeatedly unanswered phone calls or miscommunication due to language barrier is a clear indication for you to rethink your partnership.
Endless Excuses
Another sign that things are not fine is when your off-shore partner starts making excuses for low productivity or missed deadlines. These kinds of vendors often come up with endless excuses for non-delivery which is a clear indication of disorganization and de motivation at the vendors end.
High Turnover
Increase in attrition at your outsourced vendor is a one of the signs you need to lookout for. This would mean that people are not happy working for the vendor implying that the management is doing something wrong. This in turn would directly affect your partnership because the vendor might not be equipped with adequate resources to complete the project.
Increasing Costs
Occasional request for additional compensation for new services is a good indication that the vendor is making it worth for your money. However, when the additional compensation request becomes frequent for the existing services, that indicates that your vendor who was awarded this contract due to low cost is now trying to regain the cost by asking more money for the services already agreed under the contract.
SLA Failures
No matter how well the communication went at the start of the partnership, no matter how well spoken and responsive the vendor is, at the end of the day the entire basis of the relationship matters if the vendor can meet the desired SLA. If a vendor is failing frequently on the SLA’s it is an indication of much deeper problems at their end. This would indicate that the vendor is not adequately staffed or they are not able to manage resources properly.
Innovation Apathy
When a service provider is hired for a project short term or long term, other than the set work structure, a certain level of creativity and innovation is expected out of them. However, in challenging and trying times if the provider is not able to bring ideas and solutions to the table it would turn out to be a warning sign. Abhishek Sharma, vice president of pricing assurance with outsourcing consultancy Everest Group said, “Lack of investment or innovation may indicate that the provider has lost the will and intent to grow — or even sustain — the relationship. Worst case, this could point to their willingness to lose the account.”
It could happen anytime, whether at an early stage or after a long-term partnership. Mysterious pricing, constant delays, communication breakdowns or non-delivery are some of the signs you need to keep an eye out for outsourcing strategies going wrong. The point of outsourcing is to make things easier for you which would be beneficial for your organization. So, the moment you realize that it’s not working out do not hesitate to cut ties and turn back from the partnership before it turns into an outsourcing disaster.
