Navigating uncharted territory can be terrifying. First-time outsourcers encounter many unique challenges as they start their outsourcing journey. They have a lot more to consider to ensure a successful partnership.
This blog lists the most common problems encountered in first-time outsourcing and provides best practices for a seamless outsourcing partnership in the future.
The 5 Common Pitfalls of First-Time Outsourcing
Outsourcing can give businesses a great deal of advantage. But it can also be riddled with challenges, especially for first-time outsourcers. Approximately 30% of outsourcing partnerships fail within the year. These failures often point to common mistakes, such as miscommunication, cultural differences, and unmet expectations.
Here are five of the most common pitfalls first-time outsourcers often face:
1. Lack of Clear Objectives
First-time outsourcers have never worked with outsourcing partners before. Their lack of experience means they have little to no knowledge about outsourcing. Not knowing how outsourcing partnerships work makes goal-setting more difficult for them. This may also explain why many businesses start outsourcing without clear objectives.
2. Inadequate Research When Choosing an Outsourcing Partner
Most businesses today would find many options when choosing a BPO partner to work with. For first-time outsourcers, this abundance of choices may seem ideal. This makes improper vendor evaluations one of the most common pitfalls to watch out for.
Failing to evaluate BPO partners is a common mistake among first-time outsourcers. Outsourcing beginners often jump straight to partnerships, expecting better results. However, these partnerships are usually doomed to fail without properly assessing capabilities and track records.
3. Sacrificing Quality Over Cost
Outsourcing can drive cost-efficient solutions for any business. However, your company shouldn’t consider that alone when partnering with a BPO service provider. Quality must always remain front and center.
This isn’t always the case for first-time outsourcers. Most businesses looking to outsource often need to cut costs, which makes them more likely to base decisions solely on cheaper pricing schemes. This approach can cause companies to fail in making the most of their outsourcing investments.
The promise of lower costs may seem the most ideal option. But outsourcing partnerships isn’t that simple. Businesses shouldn’t overlook other factors that matter just as much.
4. Lack of Proper Communication
Another rookie mistake outsourcers make is having no proper communication framework. A successful partnership requires seamless collaboration for both parties. Unfortunately, some first-time outsourcers fail to prioritize this critical aspect of outsourcing.
Communication issues can cause numerous project issues. One negative impact is incorrect or incomplete service delivery. Furthermore, delays and reworks can increase project costs, which often spell more financial burden for first-time outsourcers.
5. Ignoring Cultural Alignment
Some first-time outsourcers also fail to consider cultural compatibility in outsourcing partnerships. Partnering with an outsourced team can mean working with an entirely different group.
These differences can mean many things. It could mean working with people of other cultures or with a team that is not familiar with your approach.
Conflicts from these differences are more likely to arise in businesses just starting their outsourcing journey.
How To Avoid These Common First-Time Outsourcing Pitfalls
The previously mentioned are just some of the mistakes first-time outsourcers can face. The good news is that they are avoidable, so long as you know which steps to take. But how exactly can businesses make better choices in their outsourcing partnerships?
Here are some of the first-time outsourcing best practices you should consider:
1. Set Clear Goals and Expectations
Like any business venture, a successful outsourcing partnership will need careful planning. Failing to do so will set you up for more problems before starting. Ultimately, misalignment between you and your outsourcing partner will increase the chances of the partnership failing. Without a clear structure, simply having an efficient team is not enough.
First-time outsourcers will benefit significantly from defining objectives. Set aside some time to outline why you need to outsource. What do you expect from your BPO partner? What are your goals and deliverables? It’s also best to determine your performance metrics ahead of time.
2. Conduct Thorough Vendor Research
Vendor research is also essential to being aligned with your BPO partner. The BPO market today is vast. First-time outsourcers must understand that not all BPOs may be the perfect match for their business.
Before you decide on an outsourcing vendor, consider some important details first. Analyze their core competencies. Is their expertise aligned with the kind of service you need? Research on their previous experiences or look through case studies. Consider conducting interviews with potential candidates as well.
3. Focus on Quality, Not Just Cost
Understandably, cost efficiency is a plus in outsourcing. But you must consider what else it could cost you. First-time outsourcers must find the right balance between saving costs and delivering excellent service.
Consider conducting a cost analysis for your outsourcing partnership. Note the costs associated with transition and onboarding and other hidden fees. Comparing these costs with the benefits you expect from outsourcing will help you make business decisions aligned with your budget.
4. Establish a Clear Communication Framework
A partnership is a two-way street. Communication and alignment are integral to your success. Furthermore, you should also remember that outsourcing is more than just a transactional agreement. Businesses need to build a healthy, sustainable relationship with their outsourced teams. Doing so will ensure a seamless collaboration for the long term.
One crucial step you can take is to set up the necessary communication tools and channels. Also, consider your cultural compatibility with your outsourcing partner. Examine their language capabilities and time zone differences. Align your company culture, work ethic, and schedules. Lastly, foster open communication among team members.
5. Regularly Review Progress and Make Adjustments
A business leader’s key responsibility is evaluating the business’s progress. The same applies to outsourcing. Doing this enables you to determine whether your outsourced team is delivering the desired results or not meeting targets.
This knowledge will help you make the adjustments necessary to maintain efficiency or improve your service. Be open with your concerns. Encourage dialogues with your outsourcing partner and collaborate on areas for improvement. Work together to develop viable solutions.
Kickstart Your Outsourcing Journey With Us!
ClearSource has driven growth for many businesses throughout the years. Our clients–big or small–come from different business areas. We offer cost-efficient solutions that put your customers front and center. We ensure our client’s investment in our service returns to them tenfold, ensuring their long-term success.
Learn how ClearSource can maximize results for first-time outsourcers. Get in touch with our team today!
