20 Outsourcing Myths, Finally Debunked!

Outsourcing is now a mainstream practice in the world of modern software development, and there are a lot of myths around it that are, of course, just myths. These misconceptions can often result in poor decision-making during project outsourcing.

So today, we’re here to break down 20 outsourcing myths to save you from development hell. Without any further delay, let’s get right into it.

1. Outsourcing Takes Control of Your Business Away From You

Outsourcing works when an organization, regardless of the scale, delegates one or more of its business operations to a third party for better task distribution and faster delivery.

However, most tend to think that outsourcing takes away the control of those departments from the client company. But in reality, outsourcing vendors only take the responsibility of completing specific tasks without taking away any authority from the vendor.

Companies take the help of outsourcing to reduce the amount of non-value-added workload to their business. Whether leveraging BPO or any other form of outsourcing, it doesn’t take control or authority away from any department.

2. Outsourcing Is Only To Lower Operational Costs

Though one of the key concerns behind outsourcing is to save costs, that isn’t the only concern corporations have. Outsourcing is an amazing gateway to a range of professionals who would cost a fortune if you were trying to hire them as full-time employees traditionally.

The reason why more and more companies are leaning towards outsourcing is the availability of the finest talents in the industry for significantly less cost. This helps smaller businesses to be on an equal footing with large enterprises.

3. Outsourced Teams Always Lack Product or Service Knowledge

This concept doesn’t work if the outsourcing team has relevant industry experience. Not all outsourcing agencies are well-versed in every single industry, but that doesn’t mean that none of the outsourcing teams have the right range of product or service knowledge to make it work.

The problem can be solved by looking for relevant experiences in the portfolio of potential vendors that you want to partner with.

4. Outsourcing Is Only For Big Businesses

Thankfully, this myth has been proven false over and over. Outsourcing isn’t just for large enterprises who are thought to be the only ones capable of bearing this huge expense.

Outsourcing is accessible to smaller companies now more than ever due to affordable pricing ranges and ease of finding the right expertise to move businesses forward. Outsourcing has become a savior for smaller businesses due to the ability to allow them to save budget.

5. Outsourcing Compromises Company & Data Security

Outsourcing requires you to hand over your confidential business data and Intellectual Property (IP) to the outsourced team. While this is a must if you want to complete development, this often brings in a question of data security.

Modern outsourcing vendors are equipped with all the right security measurements to ensure complete data encryption and data security from any prying eyes.

Outsourcing doesn’t compromise company and data security unless a business is partnering with a vendor who is using outdated technology or doesn’t have a decent NDA (Non-Disclosure Agreement) in place.

6. Outsourcing Equals To Offshoring

Offshoring, or offshore outsourcing model is one of the many outsourcing models that a business can leverage to extend their team. While offshoring is part of outsourcing, it doesn’t represent the entire aspect of outsourcing.

Since the most popular method of outsourcing is to delegate business objectives to teams in a different country, many make the mistake of associating only offshoring with all of the outsourcing.

7. Outsourcing Results In Low-Quality Work

The reality is entirely the opposite. One of the many reasons why companies utilize outsourcing models is to bring in people with high scale for comparatively lower but fair pay. When industry experts with years of experience are teaming together and working on a single product, said product can never fail or result in low quality.

Outsourcing can result in low-quality or shoddy work only when the partnering agency doesn’t house the right talents and doesn’t have the right knowledge base that they can act upon to create a good application.

8. Outsourcing Damages The National Economy

This is an old idea that’s also dissipated over time. Outsourcing too much work is said to be taking away jobs from the youth within the country while killing the economy. However expert economists have suggested over and over that outsourcing only strengthens the economic status of a country.

Outsourcing allows a business to re-focus its internal resources on core business operations. With the organization having a dedicated team for development and the entire internal team for improving the business, the company can succeed on both fronts-boosting the company economy while offering great goods and services to the public market.

When better products come into the market without sacrificing profit goals, it benefits both the people within said target market, the business, and in turns-the nation.

9. Outsourcing Creates Unemployment

This myth comes from a highly biased point of view that was created when people lost jobs due to companies offshoring entire development cycles.

But now, the scenario has changed. Especially in the U.S., the unemployment rate is at 3.8%, as of 2023, which is more than 10% lower than the 25-year average.

The statistics speak for themselves. If outsourcing creates unemployment, how is the unemployment rate so low? The only reasonable answer is that outsourcing doesn’t create unemployment.

10. Outsourcing Is Not An Ethical Practice

The idea of offshoring has become somewhat negative in many Western countries. The negativity comes from the assumption that outsourced team members or people work in poor conditions due to low payment.

This is a common misconception. Monetary values differ from one region to another, and when a business outsources to a country with a lower cost of living, the higher value of the client’s currency translates to a fair amount of payment for the vendor, making the payment fair.

Outsourcing vendors also do their best to provide the best working conditions for all team members, rendering the claim of outsourcing teams working in bad work conditions a completely false idea.

11. Outsourcing Is Not A Long-Term Solution

Though outsourcing can become too expensive in the long run, outsourcing is a long-term solution for most modern software development-related concepts.

Outsourcing can also be utilized for improving business functions and even work distribution that can continue to improve a business. Many high-end companies and industry monoliths like Google, Apple, WhatsApp, etc. also outsource their procedures to this day to ease their work pressure and increase focus on core business operations.

12. Outsourcing Is Only For Established Business Entities

A myth that’s similar to the idea that outsourcing is only for large companies who can afford it. Outsourcing vendors aren’t only there for bigshot companies, outsourcing vendors are happy to cooperate with anyone with the right mindset, collaboration plans, project requirements, and pricing.

This applies to smaller businesses even more. They can’t often cope with the high cost of hiring full-time specialists. But with outsourcing, the businesses get a chance to get in the competition.

13. Small Businesses Cannot Handle The Complications of IT Outsourcing

Here’s the fact: IT outsourcing isn’t complicated at all. All you need to do is:

• Analyze your business to determine your requirements
• Explain your requirement to your chosen vendor
• Sign contracts to come to a mutual agreement
• Assign tasks to your new team members and start developing.

Outsourcing isn’t slowing down anyone with its complexity. Outsourcing is a simple and efficient method for bringing in outside expertise for product development, and small businesses can benefit from this simplicity, and not be halted by it.

14. Healthcare BPOs Can Be Highly Expensive

Healthcare is one of the most crucial industries in the world, and the processes are highly complex. The healthcare industry can benefit a lot from the benefits of outsourcing, since there are a lot more functions in a hospital than just providing medical care and services, outsourcing can be a viable method to distribute the workload to keep the internal staff focused on providing healthcare services.

But the idea of Business Process Outsourcing (BPO) isn’t as highly expensive as many make it out to be. There are hundreds of BPOs out there who are masters of different industries, including healthcare.

These vendors are highly reasonable with their pricing, and cannot be considered expensive compared to the services they will be providing.

15. In-House Sales Force Costs Less Than Outsourcing

In-house sales forces are deeply integrated into the core business operations of a company. Meaning, that the in-house sales team must consist of full-time employees constantly working on sales.

While it sounds like a great idea, the process of maintaining a full-time, in-house sales team isn’t cheap at all. In the USA alone, maintaining a single full-time sales executive on an average salary requires a yearly payout of $90,000, which is a large amount of money when you consider a whole team.

Aside from basic expenses, you also have to consider the additional job perks and benefits that you also have to provide for each, and the final sum will only drive the budget higher.

In short, an in-house sales force isn’t cheap at all. Rather, it can be considered one of the most expensive departments in the entire business.

16. Outsourcing Sales Force Destroys Your Branding

Outsourcing the sales force gets you the side eye of many professionals in the industry since an outsider team cannot have a better concept of what the brand is about than a bunch of internal employees. As a result, their sales pitches simply won’t be as dedicated as you want them to be.

But this idea couldn’t be further from the truth. Landing sales require you to constantly think out of the box with continuous creativity. Of course, you can’t expect a constant stream of creativity from the internal team, or sometimes the abilities of the internal team may just not be enough.

To bring fresh perspectives, ideas, and additional expertise into your sales department, outsourcing the sales force is the best idea. You get unique insights and tips for creating the perfect sales pitch, or to generate the best leads where the success rate will be higher when you reach out.

Besides, outsourced teams always take time to study and analyze a certain brand before they take on the responsibilities of sales and marketing for said brand, making them well aware of what they’re signing up for.

17. Language And Cultural Barriers Always Interfere With Work In Outsourcing

Language and cultural barriers are very real issues that can interfere with the workflow at times, and we agree with that as well. But we’re living in a world where professionals are constantly upgrading themselves, and it’s not just about improving their skills either.

More and more professionals are constantly increasing their efficiency in English and professional communication to be able to better communicate and collaborate with their clients. Outsourcing vendors are constantly training their team members to be able to collaborate better with all their clients regardless of the region or country the client comes from.

An international standard of communication and collaboration is slowly coming to form throughout the world, and it surpasses any cultural and language barrier, allowing seamless collaboration between different clients and vendors.

18. Time Zone Differences Reduce Productivity

In reality, time zone differences increase productivity, not decrease it. When an outsourcing team is full of people who come from entirely different time zones, you can ensure that one team member or the other is constantly online throughout the 24-hour timeframe.

In terms of software development, time-zone difference allows you to achieve 24-hour coding, which is a concept that has become a reality, thanks to collaboration tools that allow outsourcing teams to merge their progress while being in different parts of the world, working at different times.

19. Outsourcing Vendors Should Be Chosen Based On Their Country

Regardless of the country you choose, there are a lot of professionals who can take care of your business needs and requirements as per your specifications. It’s not about choosing from certain countries, it’s about choosing the right professional from the region where you think the time zone difference is perfect and the pay scale is within your budget.

20. You Should Only Trust Bigger Outsourcing Vendors

There are thousands of vendors out there who are offering a wide range of outsourcing services. While some vendors are well known for their business collaborations and prolonged stay in the industry, others are either only starting or offering services on a smaller scale.

Bigger outsourcing vendors can offer you better services due to their prior experience, and that’s very true. But that doesn’t mean the smaller ones aren’t capable of fulfilling business requirements.

In the world of outsourcing, even a small-scale agency can house developers whose expertise surpasses most full-time employees or specialists. So there’s no shame in giving the smaller agencies a chance to take on any core business operation or development procedures.

To Wrap It All Up

For a quick recap, let’s look at all the outsourcing myths that you shouldn’t believe once more

• Outsourcing takes control of your business away from you
• Outsourcing is only to lower operation costs
• Outsourcing teams always lack product or service knowledge
• Outsourcing is only for big businesses
• Outsourcing compromises company and data security
• Outsourcing equals offshoring
• Outsourcing results in low-quality work
• Outsourcing damages the national economy
• Outsourcing creates unemployment
• Outsourcing is not an ethical practice
• Outsourcing is not a long-term solution
• Outsourcing is only for established business entities
• Small businesses cannot handle the complications of IT outsourcing
• Healthcare BPOs can be highly expensive
• In-house sales force costs less than outsourcing
• Outsourcing sales force destroys your branding
• Language and cultural barriers always interfere with work outsourcing
• Time zone differences reduce productivity
• Outsourcing vendors should be chosen based on their country
• You should only trust bigger outsourcing vendors

We hope our discussion will help you stay away from the malpractices and misconceptions of the industry while choosing the right vendor for your upcoming projects.

Too tough to choose in an overwhelming sea of vendors with unique skills? Why not make it easier by partnering with Impala Intech? We offer a wide range of software development services, making us a viable choice for your next app development project.

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