Many companies are turning to BPO as a means of cutting costs, maintaining competitiveness, bridging their skills gap and much more. Outsourcing is not really a new thing just that it wasn’t given a name in the past.
Companies and even government institutions have always offloaded some of their non-critical activities to an external contractor so as to focus on their core business.
The following are some of the blunders you should avoid making when outsourcing as well as risks and how to mitigate them for success.
1. Not Focusing on Trust from The Start
Trust is a big thing when it comes to outsourcing, remember that you are surrendering some important aspects of your business to an external entity. Trust is not just about the security of documents and company secrets; it also includes having faith that the contracting entity can deliver on its promises to keep your business running smoothly.
Here are some of the ways to mitigate this risk:
- Do a thorough background check on the company you will be outsourcing to.
- Be very clear about your expectations and security requirements.
- Make it a legal and official engagement.
- Always be clear with communications.
Trust is really important especially when you are dealing with sensitive client materials for instance if you are in the legal profession. Looking for the best services in legal translation? Make trust a priority from the start.
2. Not Being Clear About Quality Control
This might be one of the biggest risks that come with outsourcing. Sometimes the contracted company may not adhere to the highest QC standards when working on your products. This is especially common when they are a cheap contractor that promises to cut your production costs by a significant percentage as part of their proposal. You need to communicate on the desired quality standard with the contractor and keep on checking back throughout your engagement.
3. Skipping Documentation
As expected, outsourcing involves a lot of documentation from both sides from the start and throughout the contractual period. The last thing you want is to have lax documentation approach with an external entity. There are legal and operational risks associated with inadequate documentation when outsourcing especially if it is an international engagement. Make it a requirement that all transactions and other important processes are adequately documented in an accurate and timely manner.
4. Allowing Your Business to Be Locked In
This is perhaps the most egregious risk associated with today’s outsourcing industry; being overly dependent on an external entity to the point that you cannot survive without them. It is common in the software and manufacturing industries. Have in place a robust exit plan or alternatives to mitigate the risk of being locked in.
Outsourcing is great for your business if done right. Be proactive with your communications and always be ready with an exit plan if things do not work out. All the best in your business.