8 Common Outsourcing Mistakes & How to Avoid Them

The single most important step to growing your business, and saving money in the process, is strategic outsourcing. However, work cannot simply be handed off to an exterior source without understanding the implications and potential issues that arise when outsourcing.

Outsourcing, essentially, is like adding an extra set of skilled hands to your team, but virtually. It’s about delegating tasks or functions to a specialized third party, because you may not have the capacity or expertise to handle in-house.

The right outsourcing partnership can seamlessly blend with your in-house team, streamline operations, and become a catalyst for your growth story. Unsurprisingly, large and small businesses are increasingly adopting this model.

Sounds enticing, doesn’t it? Well, as simple as it may seem, there are a few tripwires to watch out for. Yes, we’re talking about the most common outsourcing mistakes. We’ve all heard those scary tales where a misstep in the outsourcing journey resulted in costly mistakes, lost time, and, frankly, lots of headaches.

Avoiding these mistakes is crucial for reaping the maximum benefits from your virtual team. We Are Amnet can navigate you through 8 common mistakes and how to dodge them for a successful outsourcing journey in 2023.

What Are the Most Common Mistakes of Outsourcing?

Embarking on an outsourcing journey without understanding the potential pitfalls can lead to a bumpy road or, worse, a dead end. These hiccups often stem from misconceptions or a lack of experience in managing an outsourcing team. Here are the 8 most common outsourcing mistakes you want to have awareness of.

1. Misunderstanding the Role of an Outsourcing Provider

When you think of an outsourcing provider, what comes to mind? A distant entity silently handling tasks that you’ve delegated?

An outsourcing provider does much more than execute your outsourced functions; they become an extension of your business. They bring their unique expertise and perspectives to help you expand and meet your goals.

One of the most common mistakes businesses make is misunderstanding the role of an outsourcing provider, treating them merely as a cost-cutting instrument rather than a strategic partner. This narrow viewpoint can lead to disappointment, ineffective collaboration, and, potentially, business failure.

So, how do we avoid this misunderstanding? Let’s approach outsourcing with a broader lens:

• Establish a Strategic Perspective: Don’t just see outsourcing as a way to save costs. Instead, view it as an essential part of your business strategy. This shift in mindset can set the stage for a successful outsourcing partnership.
• Understand Their Role: Recognize that an outsourcing provider offers more than just additional hands. They bring their skills, expertise, and fresh perspectives, which can be invaluable to your business.
• Open Communication: Encourage regular dialogue with your outsourcing provider. This can help both parties understand expectations, business objectives, and the way forward.
• Invest Time: Spend time understanding and guiding your outsourcing provider. Your involvement can make a significant difference to the output.

2. Selecting the Wrong Outsourcing Provider

Have you ever heard the phrase, “You get what you pay for?” Well, that adage rings true in the world of outsourcing too.

When choosing an outsourcing provider, it’s a massive misstep to base your decision on cost alone. An outsourcing provider might offer enticing cost savings, but they’re not the right fit if they can’t deliver the quality of work you need or don’t align with your business values and goals.

In outsourcing, the ‘wrong’ provider fails to understand your business model, can’t execute your outsourcing functions as per your standards, or lacks the requisite experience and skills. It’s like adding outsourced employees who don’t mesh with your team — a recipe for chaos and confusion.

To avoid falling into the trap of selecting the wrong provider, consider the following while embarking on the hiring process:

1. Experience and Skills: Check if the provider has a track record of managing similar projects. Do they have the necessary skills and expertise? Be sure to ask for references and case studies.
2. Cultural Compatibility: Having a BPO company that aligns with your culture, communication style, and values is crucial. This aspect ensures smoother collaboration and integration.
3. Flexibility: A good provider should be able to adapt to your business’s changing needs. They should have a proactive approach and a readiness to scale as per your demands.
4. Quality over Cost: Yes, outsourcing is a great way to achieve cost savings, but it shouldn’t be at the expense of quality. Striking the right balance between cost and quality is key in choosing the right provider.

3. Not Setting Clear Expectations with the Outsourced Team

Whether you’re a small business outsourcing software development or a multinational corporation entrusting an offshore team with your company’s data, setting clear expectations is a fundamental part of your outsourcing strategy.

The mistake of not communicating expectations effectively often leads to confusion, inefficiency, and poor output quality. This might result in a project that strays off course, fails to meet objectives, or, worst-case scenario, jeopardizes your business operations.

Here are some tips for setting and effectively communicating clear expectations with your outsourced team:

• Define Goals Clearly: From the outset, ensure you have crystal clear objectives for the project. What is the final deliverable? What is the timeline? How does this project align with your overall business goals?
• Communicate Effectively: Maintain open lines of communication. Regular check-ins and updates can help keep the project on track and identify potential issues early on.
• Provide Detailed Guidelines: The more information you provide, the better. Detailed guidelines can help the outsourced team understand exactly what you expect from them. Don’t leave them fumbling around in the dark.
• Set Performance Metrics: Determine how you will measure success. These metrics should be quantifiable and agreed upon by both parties.

4. Lack of Communication with the Outsourcing Provider

In any relationship, be it personal or professional, communication is critical. The same goes for the relationship between companies and their outsourcing providers.

Communicating effectively with virtual teams scattered across different time zones and cultures can be challenging, but it’s crucial to successful outsourcing. Unfortunately, it’s a factor most businesses overlook, leading to misunderstandings, delays, and sometimes even the failure of the entire project.

Insufficient or ineffective communication can be a huge mistake in outsourcing. Imagine playing a game of ‘telephone,’ where the message gets distorted as it passes through several people. In the end, what comes out is far from the original message. This is what can happen if there’s no clear communication in outsourcing.

So, how can you communicate effectively with your provider? Here are some suggestions:

• Regular Updates: Schedule frequent and regular meetings to discuss the progress of the work. This helps keep everyone on the same page and allows any adjustments or feedback to be implemented promptly.
• Clear and Concise Messages: Ensure your instructions and expectations are clearly and explicitly communicated. Avoid using jargon or niche terms that could be misunderstood.
• Feedback Mechanism: Encourage a two-way communication street. Allow your provider to ask questions, provide feedback, and suggest improvements. This fosters a positive working relationship and better results.
• Use Technology: Leverage communication tools that are easy to use and accessible to everyone. This could be anything from emails to project management software to video conferencing tools.

5. Not Treating the Outsourced Team as Part of Your Team

How do you see your outsourced team? As an auxiliary unit? Or as an integral part of your business operations?

The answer to this question could determine the success of your outsourcing endeavors. Unfortunately, most outsourcers make the mistake of treating their outsourced team as separate from their in-house staff. This often results in a disconnect, leading to miscommunication, misunderstanding, and lackluster performance.

During the early stages of outsourcing, entrepreneurs typically focus on the tasks to be outsourced and the money to be saved. While these are essential considerations, ensuring that the outsourced team feels like a part of your company is equally crucial. This sense of belonging can significantly improve their motivation and productivity.

Here’s how you can integrate the outsourced team into your own:

• Inclusion in Communication: Include your outsourced team in relevant meetings, discussions, and decision-making processes. This will make them feel involved and valued.
• Establish a Company Culture: Make efforts to extend your company’s culture to the outsourced team. This could be through team-building exercises, training, or simply sharing updates about your company’s achievements and events.
• Mutual Respect: Treat your outsourced team with the same respect and consideration as your in-house employees. Remember, they’re equally crucial for your business’s success.
• Provide Feedback: Regularly providing constructive feedback to your outsourced team can help them improve their work and align it more closely with your expectations.

6. Failing to Manage the Outsourcing Project Properly

Effective management ensures the task is completed successfully, within budget, and on time. However, some businesses falter at this crucial stage, leading to problems that could have been avoided with proper oversight.

Common mistakes in managing outsourcing projects include assuming that once you’ve outsourced a task, it’s off your plate. Ignoring regular check-ins, not adequately allocating resources, or similar mismanagement can lead to a lower quality of services, delayed deliverables, and wasted resources.

Here’s how to steer clear of these pitfalls and effectively manage outsourcing projects:

• Assign a Project Manager: A dedicated project manager can monitor progress, manage resources, and act as a liaison between your in-house team and the outsourcing provider. This person should deeply understand the project and the desired outcome.
• Regular Check-ins: Schedule consistent updates and check-ins to ensure the project is on track. This can help prevent potential problems and keep everyone aligned.
• Clearly Defined Deliverables: Create well-defined, quantifiable deliverables. This gives the outsourced team a clear idea of what’s expected of them and helps you gauge their performance effectively.
• Resource Management: Ensure you’re allocating adequate resources – be it time or tools – to facilitate the project. Balancing cost-effectiveness and resource availability is key.

7. Not Considering Cultural Differences

Our world is a rich tapestry of cultures, each with its unique values, norms, and work ethics. This diversity, while enriching, can pose challenges in outsourcing, particularly when working with teams across borders. Ignoring these cultural differences is a common pitfall that can lead to misunderstandings, decreased productivity, and conflict.

Here are some tips for dealing with cultural differences when outsourcing:

• Cultural Training: Organize cultural sensitivity training for your in-house team. This can help them understand and respect cultural nuances, and will enable the new partnership to flourish.
• Open Communication: Encourage open dialogue about cultural differences. If there’s something you don’t understand, ask. If there’s something that needs to be clarified, discuss it.
• Flexible Management Style: Adapt your management style to accommodate different cultural practices. This shows your respect for the outsourced team’s culture and can boost their morale and productivity.
• Patience and Understanding: Cultural understanding takes time. Be patient and maintain a positive attitude, even when there are hiccups along the way.

8. Outsourcing Core Business Functions

Understanding the nature and purpose of core business functions is vital when considering what to outsource. Your core business functions are activities central to your company’s value proposition and differentiate you from competitors. They are often closely linked to your company’s core competency and core values.

For example, if you run a tech company that prides itself on innovative software development, this aspect is a core business function. Or if you’re a marketing agency renowned for your creative campaigns, your creative ideation process is a core business function.

One mistake companies often make is outsourcing these core functions, which can lead to losing control over quality and the unique value your company provides. Outsourcing should allow you to focus more on these core functions by taking care of the peripheral tasks that support them.

How do you identify what to outsource and what to keep in-house? Here are a few tips:

• Identify Your Strengths: Determine what your company does best and what differentiates you from competitors. These are the core competencies that you should retain in-house.
• Analyze Costs and Benefits: Evaluate the costs and demands of performing non-core functions in-house versus outsourcing them. Consider factors like speed, efficiency, and the skill level required.
• Consider Control and Quality: If a function requires a high level of control to ensure quality work or involves confidential or sensitive information, it’s often better to keep it in-house.

Start Your Successful Outsourcing Journey with We Are Amnet

Navigating the outsourcing world can be daunting, but not when you have a reliable partner like We Are Amnet. With a proven track record and impressive case studies showcasing their exceptional work, We Are Amnet stands as a beacon of trust and efficiency in the creative production outsourcing realm.

We Are Amnet doesn’t just offer outsourcing services; we offer Smartshoring. This model delivers the ideal balance of in-country client services and outsourcing efficiency, making it a win-win for your business. Our dedicated teams are proficient in all aspects of creative production.

Choosing We Are Amnet means you’re not just outsourcing your tasks; you’re partnering with an entity that treats your success as its own. You’re choosing quality, reliability, and a team committed to bringing your vision to life.

Are you ready to take the next step in your outsourcing journey? Contact us now!