Workplace Issues

How Outsourcing Fails

Before your firm considers outsourcing, makes sure you avoid focusing on cost rather than results.
Iris DorbianAugust 28, 2014

With companies continuing to slash expenses to meet their desired bottom lines, it’s become increasingly popular for many to use outsourced talent for a project. That’s especially so within the IT market.

OutsourcingBut that doesn’t mean things won’t get lost in translation and errors won’t get made between the company and the outsourced hire. Courtesy of InformationWeek, below are four of the most common musts to avoid companies make when they outsource to offshore clients.

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  1. Playing the blame game: Romi Mahajan, president of marketing consulting firm, the KKM Group, which outsources some of its IT operations, tells InformationWeek he sees this all the time.

“The customer blames the offshore company for overpromising, and a routine issue then becomes a mountain of a problem,” he says. “I see this kind of ‘us versus them’ thinking a lot. It delays projects for months.”

  1. Focusing on pay rates over results: Another problem that pops up when companies outsource is obsessing over getting the lowest hourly rates without looking at the bigger picture.

Instead of haggling with an offshore firm about fees, companies that outsource need to consider how large a staff they want to bring on for a project as well as the staff’s level of experience. For example, hiring a huge but inexperienced team at a lower rate is counterproductive over hiring less but more experienced workers at a higher rate.

  1. Being a control freak: Micromanaging is never a good idea. Not only do constant interventions impede the operational flow of a project, they’re a time waster as well. If you’re an IT company outsourcing to an offshore client, have confidence that outsourcer’s employees will know how to perform the job and bring ideas to the table. If you want to promote efficiency, avoid micromanaging.
  1. Thinking you can outsource your whole brain: You will also run into problems if you give the outsourced workers way too much leeway. Don’t assume they’re psychic and will know exactly the kinds of business goals and targets you want to achieve.

Mahajan agrees completely. “It’s almost impossible to convey 100% the desired outcome of an IT outsourcing project,” he says. “Only the company knows exactly what it wants to achieve. Don’t think the outsourcer will do all the thinking for you.”

Source: 4 Outsourcing Mistakes Companies Make   

Photo: Sander Spolspoel