15 Outsourcing Mistakes To Take Note of And Avoid ASAP

Outsourcing is a broad term, covering multiple outsourcing models that come with their own intricacies. There’s also the factor of making the right choice when outsourcing business procedures. When the process is so complex, you are bound to make one or more mistakes.

As the savior of your business, we are here to discuss 15 outsourcing mistakes to save you the stress of making the wrong decisions. In case you’re in the process of making any of these mistakes, we’ve added the solutions too!

1. Not Having A Plan Before Outsourcing

Outsourcing requires a thorough planning of all your requirements and objectives before choosing the right model to suit all your needs. To know what you need, you must perform a business analysis before proceeding any further.

Most businesses jump right into it without doing any proper business research, and the result is always choosing a model that doesn’t offer the right facilities to fulfill the business requirements, resulting in exceeded budget and constant project delays.

2. Having Insanely High Expectations

Outsourcing can offer you high-quality end products since you can onboard industry professionals who come in with years of experience. But this doesn’t mean your expectations should be sky-high.

Most companies put mountain-high levels of expectations on their outsourced development team, and the team is in constant crunch mode because of it. Extreme pressure and always changing the design to meet perfection often results in an even worse product.

3. Making Decisions Too Fast

Decision-making is a process that you can never rush. Any decision regarding business objectives or the future of the operation requires analysis of all the right success metrics and thorough discussion with all the stakeholders before proceeding to the next step.

When outsourcing, most companies rush to upscale their business in a hurry since they already have additional team members in place. But here’s where it goes wrong: not every outsourced team can handle every objective assigned to them if it’s out of their zone of expertise.

Decisions made without the consultation of the stakeholders can lead to incorrect business choices that can tarnish the brand’s reputation as well as create a product that doesn’t have any public appeal.

4. Outsourcing Every Single Task

Outsourcing is a great option for reducing the workload of your internal team so they can focus on core business operations. However, outsourcing every single task within the business can have the opposite effect.

When you’re outsourcing all of your business operations and leaving nothing for the internal team, you have zero control over your own business and all of it is at the mercy of the vendors. If one or more of your vendors don’t operate, the outsourced section of your business comes to a complete halt.

Never outsource every single task in the business. For outsourcing, always choose non-core operations for outsourcing so your internal team can keep the core business running and operational.

5. Not Being Sure About The Right Process To Outsource

Sometimes, company owners suffer from indecisiveness and don’t know the right process to outsource. The situation arises when the business is either too sophisticated, or the business is relatively new and the owner is inexperienced.

Often startup owners act on impulse and outsource core business processes, leading to slow business progress and often a total halt due to the vendor not continuing their services.

Outsourcing the wrong processes can also cause the internal team to feel less valued within the company, since it indicates the management doesn’t trust the abilities of the internal team, leading to low morale and less productivity.

6. Only Going For The Cheapest Options

One of the main concerns of outsourcing is to save costs on different operations. But if cheap is the only thing you’re rooting for, you’re bound to partner with a service provider whose services aren’t efficient enough to move processes forward.

While most vendors offer the right services for affordable pricing models, most vendors offer their services cheap simply because their services aren’t efficient enough to stay competitive in the current market.

When you’re desperately going for the cheap option, you’ll eventually pair with a vendor whose services are not on par with current industry standards.

7. Not Clarifying The Terms & Conditions With The Vendor

Outsourcing is as simple as signing a contract with the right terms and conditions and starting work. But the real complication resides within creating the contract itself.

Many business owners don’t take the help of a professional legal counselor and create a contract that isn’t foolproof, leaving legal loopholes that either can get the client in legal trouble or can be exploited by the vendor.

The easiest way to resolve it is to clarify each term and condition mentioned within the contract over a detailed meeting with the vendor and have the entire contract reviewed by a legal expert once it’s created.

8. Lagging In Terms of Technology

More and more organizations are taking the route of digital transformation to stay up-to-date with the ever-shifting market as much as possible.

But most companies don’t want to take the step simply because they’re too comfortable operating with the current infrastructure. While the ease of moving around can help to a certain extent, not shifting company infrastructure to modern requirements can cause an organization to fall behind, especially if they’re in the software development industry.

As a business owner, you should always take the necessary initiative to reach complete digital transformation to stay competitive.

9. Not Doing Proper Research Before Partnering With A Vendor

There are thousands of outsourcing vendors in the modern market, and they all offer a wide range of services. Some of them are well-reputed, and others are relatively new. With so many options to choose from and explore, not researching your vendors is a huge mistake.

There’s a lot to consider before choosing the right outsourcing vendor, and all considerations can only be made through researching the abilities and expertise of all potential vendors. Many businesses jump right in after they find a vendor who can offer their required services without any research, and this can lead to a myriad of issues.

Not knowing the extent of experience of your vendors can cause development slow-downs or complete halts till the right experts are on board. Lesser experienced vendors will not be able to offer the required deliverables

10. Not Finding Experts According To Your Niche

Outsourcing isn’t a one-size-fits-all solution. Different vendors offer different services that can help businesses solve different issues. It’s not just about outsourcing your process, it’s about outsourcing a process to the right experts.

There are times when you have a very niche requirement, experts for which aren’t commonly available. Even then you should expand your horizon with an offshore outsourcing model and find the right expert for your project.

Most businesses don’t want to go through the additional hassle, and onboard someone who only has a surface-level idea about the operation. Lack of expertise eventually leads to unsatisfactory results from the development cycle.

11. Skipping The Interview Phase Before Signing The Contract

Outsourcing is a great way to circumvent the traditional daunting process of onboarding employees. Still, an interview with your potential extended team members is very crucial.

With an interview, you’re connecting to an individual and getting to know about their strengths and abilities, and you can place team members according to the right requirements within the development cycle.

In a rush to start development as soon as possible, most clients skip the interview process. Without proper knowledge of the extent of the abilities of their team members, the management starts assigning tasks that aren’t either suitable for their skillset or are completely irrelevant.

Not optimizing the use of talents is a waste of resources, and this can lead to project delays and additional expenses with more development time wasted.

12. Not Clarifying The Objectives To The Vendor

Different businesses have different goals they want to achieve with outsourcing. A business owner should always clarify all their objectives to the vendor so they have a goal to achieve and can deploy resources accordingly.

Not communicating the needs and requirements of the business can lead to the vendor misinterpreting the final goal from vague descriptions. Without working on the right objectives, development time can be delayed and it defeats the purpose of outsourcing.

13. Neglecting Data Security Protocols

Data security is one of the biggest concerns of the modern software world. With more and more businesses and products becoming cloud-based, it’s become relatively easier for malicious actors to get their hands on confidential business or product information, putting all stakeholders at risk.

A well-reputed vendor will always have rules and regulations in place that are compliant with the international standards of data protection and privacy, and the client should also have their own NDA (Non-Disclosure Agreement) ready that the vendor has to agree to.

Neglecting proper data practices can lead to theft of Intellectual Property (IP), as well as classified company data, including client information.

14. Not Having The Right Execution Plan For The Outsourced Team

To work towards an objective, outsourcing teams always follow a certain workflow infrastructure. While recruiting the best talents is a great idea, it’s also vital that you have an execution plan ready for when the team is ready to work on your project.

A business owner knows how their business operates more than any outsider ever could. To ensure the newly onboarded team can easily navigate their way through business processes that can help them optimize their workflow and offer the right deliverables, the client should always have a ready plan of execution before onboarding the extended team.

15. Treating The Partnership As A Short-Term Collaboration

This practice comes from one of many outsourcing myths, that is outsourcing is a short-term collaboration. Which, of course, is entirely false.

Outsourcing isn’t a one-and-done method. The partnerships for a software development project are usually long-term since the responsibilities of a vendor don’t end once the development phase has ended.

The team has to stay in touch to provide support and maintenance for completed applications. Plus, once the current contract term has ended, the client can also contact the same team for future operations, making it a long-term relationship on a technicality.

To Wrap It All Up

Before ending this discussion, let’s take a quick look back at all the outsourcing mistakes that you should avoid

• Not having a plan before outsourcing
• Having insanely high expectations
• Making decisions too fast
• Outsourcing every single task
• Not being sure about the right process to outsource
• Only going for the cheapest options
• Not clarifying the terms and conditions with the vendor
• Lagging in terms of technology
• Not doing proper research before partnering with a vendor
• Not finding experts according to your niche
• Skipping the interview phase before signing the contract
• Not clarifying the objectives to the vendor
• Neglecting data security protocols
• Not having the right execution plan for the outsourced team
• Treating the partnership as a short-term collaboration

Want to avoid all the outsourcing mistakes and make the right choice for your project? Consult about your next project with Impala Intech to make sure you’re making all the right business and development decisions!

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