A growing business means good business - a distinct mark of success and the aspiration of every entrepreneur. However, expanding a business also signifies an increase in workloads and correspondingly demands increase in the workforce. This is usually the time when business owners start to deliberate the need to outsource contractors especially in the line of production, IT support and customer service.
For many years, outsourcing has been tried by a number of companies as an effective approach to sustain labour needs while maintaining low production cost. But in spite of this, great thought should still be given prior to outsourcing because like in every major decision, there will always be underlying risks to these endeavours. Administrators and manager ought to know how to recognise common causes of outsourcing failures so they can prevent them.
Setting Unclear and Improbable Expectations
One of the most common causes of outsourcing failure is having too high expectations to the point that it has already become unrealistic. It does not help that there are also contractors who play up their expertise, proficiency and benefit so that they could just close the deal.
It is very important that from the beginning the scope of the project and the company's goal and vision are all thoroughly discussed and agreed upon. If the expectation of the company and the contractor do not see eye-to-eye, dissatisfaction and even failure are bound to happen.
Insufficient Planning Prior Outsourcing
Certain companies perceive outsourcing as a quick fix or a universal solution to their current problem, this should never be the case. When we over promote the benefit of outsourcing, we sometimes overlook the many details which should be taken into consideration prior outsourcing.
A company should have adequate funding to support the cost of outsourcing - even if one of your goals is to lower the production cost, a sufficient budget should still be readily available so you can get hold of and continue to support a best priced contractor with outstanding competency. It is also important to take note of the openness and readiness of your internal workforce to the idea of subcontracting as mutual partnership would play a huge part of your company's success.
Poor Communication and Distance
Because some countries offer cheaper cost of labour, it is expected to see an increasing trend in offshore outsourcing. But even though this has been proven to be beneficial in the financial aspect, this inclination also generates other causes for failure and client dissatisfaction.
Managing a group of people within an organisation can be a tough job, just imagine how much more complex and demanding it would be to manage a group of people on a different time zone. Likewise, cross-cultural concerns and language barriers were also found to greatly influence communication failures.
For a successful outsourcing relationship, both the outsourced and the company as a client should be able to work in a collaborative manner. Trainings and other learning tools should be implemented to downgrade barriers in communication, if not, the management should seriously consider outsourcing their activities nearby.
For many years, outsourcing has been tried by a number of companies as an effective approach to sustain labour needs while maintaining low production cost. But in spite of this, great thought should still be given prior to outsourcing because like in every major decision, there will always be underlying risks to these endeavours. Administrators and manager ought to know how to recognise common causes of outsourcing failures so they can prevent them.
Setting Unclear and Improbable Expectations
One of the most common causes of outsourcing failure is having too high expectations to the point that it has already become unrealistic. It does not help that there are also contractors who play up their expertise, proficiency and benefit so that they could just close the deal.
It is very important that from the beginning the scope of the project and the company's goal and vision are all thoroughly discussed and agreed upon. If the expectation of the company and the contractor do not see eye-to-eye, dissatisfaction and even failure are bound to happen.
Insufficient Planning Prior Outsourcing
Certain companies perceive outsourcing as a quick fix or a universal solution to their current problem, this should never be the case. When we over promote the benefit of outsourcing, we sometimes overlook the many details which should be taken into consideration prior outsourcing.
A company should have adequate funding to support the cost of outsourcing - even if one of your goals is to lower the production cost, a sufficient budget should still be readily available so you can get hold of and continue to support a best priced contractor with outstanding competency. It is also important to take note of the openness and readiness of your internal workforce to the idea of subcontracting as mutual partnership would play a huge part of your company's success.
Poor Communication and Distance
Because some countries offer cheaper cost of labour, it is expected to see an increasing trend in offshore outsourcing. But even though this has been proven to be beneficial in the financial aspect, this inclination also generates other causes for failure and client dissatisfaction.
Managing a group of people within an organisation can be a tough job, just imagine how much more complex and demanding it would be to manage a group of people on a different time zone. Likewise, cross-cultural concerns and language barriers were also found to greatly influence communication failures.
For a successful outsourcing relationship, both the outsourced and the company as a client should be able to work in a collaborative manner. Trainings and other learning tools should be implemented to downgrade barriers in communication, if not, the management should seriously consider outsourcing their activities nearby.
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