Easy Outsourcing Tips to Ensure Success and Avoid Pitfalls

EASY OUTSOURCING TIPS TO ENSURE SUCCESS AND AVOID PITFALLS

“What is outsourcing to you?”, Is it something that you would say yes to or simply deny it? The words offshoring and outsourcing provoke different thoughts in different people. For some it’s a natural aspect of globalization and growth, whereas others may find them as threatening, increased complexity, and reduction in quality of product or services. Offshoring business processes can sow the seeds of great benefits for your business such as reduced operational costs, access to domain experts, and agility and scalability to modify the process as per the requirements. However, the inherent risks associated with offshoring like uncertainty about how the work is getting done, unable to manage offshore team like an onsite team, project delay, etc. always make the decision makers rethink about their outsourcing needs.

It is the approach a business takes to outsource a part or a complete process to an offshore team that shapes the ultimate success or failure. It is how offshoring is getting done that is vital. Therefore, a clear and robust strategy becomes extremely vital in order to reap the benefits of outsourcing/offshoring. Follow the below mentioned easy yet effective offshoring tips to minimize risks and maximize opportunities of offshoring business process.

Here are the top 5 Easy Outsourcing Tips to Ensure Success and Avoid Pitfalls which we offer at MDS:

1. Get a clear objective

A successful offshoring strategy begins with a clearly defined objectives and measurable goals. Find out why you want to outsource, reflect its business value, and develop a working framework for decision making, such as which vendor to work with, which process/project to outsource, which outsourcing models to use, etc. Clear and defined objectives help you to evaluate the success of your strategy and measurable goals are the functional metrics helping you to monitor progress, take corrective actions, and predict future performance.

2. Count costs

One of the prime reasons to outsource is to reduce current costs. But, business leaders always consider that there are hidden costs in outsourcing. It’s quite easy to underestimate the true cost of offshoring when there’s a constant pressure of cutting down the cost by putting your expensive labor roles offshore. Hidden costs tend to range from 16 to 50 percent of the outsourcing contract itself and sometimes even more. There are costs related to selecting the right vendor, transitioning the work and refining process, training offshore staff, and more.

3. Create an aggressive risk mitigation plan

An agile and scalable risk mitigation plan is thorough, well thought-out and takes time to produce and manage, but it is worth the investment. Today, it is simply not enough to just having a list of potential risks and be aware that things might go wrong. Rather, business leaders need to prioritize and aggressively manage the risks, keep the mitigation plans up to date, actively monitor risk development, take proactive actions to avoid risks from getting materialized and if they do occur, act quickly to mitigate the impact.

4. Start slowly and grow gradually

Often, decision makers tend to rush and put their entire business critical process on the offshore team as they are compelled to achieve enormous return on their first project. However, how quickly to move forward with outsourcing should be determined by the success rate of every following project. Start small with a single and well defined pilot project. It reduces the initial risks, allowing offshore and onshore team to get accustomed to the changes.

5. Create a high level of communication transparency

Communication gap between a company and the vendor is often the reason behind outsourcing failure. When you are outsourcing ask the vendor to keep you notified at every stage. Ensure that you have a direct access to the overseas team as well as the management. Even small matters can grow and become critical business issues that further lead to delay in deliverables and increased costs.

Cheers!