The origin of outsourcing goes back a lot further than we can possibly think. However, it became a major business strategy only in the late eighties. Offshore outsourcing has gone through tremendous changes over the last few decades. Today, every industry has experienced the powerful outsourcing waves of offshoring, BPO, KPO, LPO, and more.
Innumerable organizations across the globe have benefitted through offshore outsourcing. While CEO’s globally swear by its cost effectiveness and the peace of mind it brings for businesses, outsourcing also comes with its own set challenges. Let us discuss about 5 major problems faced by companies which outsource work, and how we can combat them.
Outsourcing Challenges and Their Solutions
Panic Amongst in-house Human Resources –Existing employees in various organizations have the fear of losing jobs when their organizations plan to outsource work. This feeling of uncertainty makes them look for better jobs elsewhere. Attrition and loss of performing employees can have a major impact on the company’s bottom line.
Attrition is expected, but companies can internally build up a center of excellence for various domains, where the existing workforce can get cross-trained in different domains and processes. Their fear would vanish gradually as they gain new expertise, and they would be able to continue growing within the organization.
Choosing the Right Service Provider – Finding and choosing the right vendor is vital for the success of the entire outsourcing process. A blunder during vendor selection can lead to a lot of frustrations and misunderstandings.
During selection, the vendor or service provider should be picked as per the organization’s requirements and desired result. Before the contract signing, the organization owner must be fully aware of the type and term of the contract. A trial or test run prior to engaging in a long-term contract would be great. Post project implementation, the main performance pointers should be monitored closely and appraisals should be done frequently.
Misunderstanding The Contract & Legal Implications – Understanding the contract with all its legal implications is a must, otherwise the contract is destined to be a failure.
Conforming to the local laws is vital for avoiding various legal complications that the parties may face in the future. During contract negotiation, both the parties should be clear about the terms of the contract.
Cultural Tangles - Cultural differences and peculiarities have a great impact on offshore outsourcing deals. Cultural peculiarities can be of two types - Corporate and Country-specific. Many a times, outsourcing organizations find it hard to resolve cultural tangles.
Prior study of various complexities of the outsourcing process will help in resolving cultural tangles. The outsourcer should also understand the impact of outsourcing on people of a different cultural background. A robust multi-cultural sensitization program will assist in bringing cultural coherence and synchronizationin both the parties.
Forgetting After Outsourcing Won’t Work– As an outsourcer, you don’t have to worry much about the outsourced work getting completed. However, forgetting to keep an eye on the work progress can lead to project management issues.
Keeping a tab on the outsourced project’s progress regularly is important. Prudent monitoring will help the outsourcer ensure that the processes are in place and functioning well. This will also help in maintaining total control of the outsourced project.
It’s important to understand that most outsourcing projects are successful. However, project disasters may happen due to various reasons including weak process development and incomplete project plan. Working with a team sitting thousands of miles away and being available in different time zones can be quite challenging. However, few good practices like the ones mentioned above will surely help you in solving most of your outsourcing woes.