Every endovour including outsourcing has it’s pros and cons. In most cases the pros tend to outweigh the cons however any organization looking to outsource should analyze their business carefully to make sure that outsourcing is for them. Should you come to the conclusion that indeed it is suitable for your business be ready to tackle the cons that may arise. Below we take a look at the possible drawbacks that you may face during the outsourcing process and their solutions.
1: Loss of managerial control.
With outsourcing there comes possible loss of managerial control as the control now lies in the hands of the outsourcing third party. Although the outsourcing company holds the contract the management of the outsourced product or service will have to be transferred to the third party. The relationship between the third party vendor and the company/project might not be as strong as that of a company and its employee.
Solution: Ensure your entire organization knows what is going on. Keep them in the loop in each and every step of the outsourcing process. Maintain open lines of communication and not only with the management but the entire team. At Adept we make sure to keep our clients up-to-date with what is happening. This in turn provides them with sufficient information to keep their team informed.
2: Insufficient knowledge of the organizational culture.
Since the third-party in an outsider to your company chances are that they are not well-versed with you organization’s standards, mission, vision and values that drive your organization. With this the possibility of them failing to meet your expectations are increased which might result in poor quality products or services.
Solution: Ensure that the third party vendor is well-versed in your company’s, values, mission, vision, goals and objectives. This will ensure that when they are providing the goods or services they will be aligned with the things that drive your organization. At Adept we take key interest in getting to know our clients before embarking on the tasks. This enables us to tailor and personalize our services to fit each and every one of our client’s need.
3: Possible resistance from internal employees.
Outsourcing is commonly associated with reducing staff levels rendering it a sensitive issue that needs to be addressed with care and grace. Internal employees may at times feel threatened by outsourced employees/service. This is in reflection to concerns about their job security. Therefore a company might possibly face opposition from internal staff when it comes to outsourcing.
Solution: A company should strive to nature strong relationships with their internal staff so that when they embark on outsourcing they will not feel threatened. Invest in their development through ways such as trainings and make them feel that they are valued. Try and address their concerns as soon as they are raised.
4: Privacy and confidentiality issues.
Most of the time outsourcing calls for sharing of confidential information meaning that there is a risk that privacy may be breached.
Solution: Evaluate the outsourcing company to ensure that the shared information is protected and put in place penalty clauses should such a compromise take place.
A t Adept we have Firewall protected networks, encrypted servers, Virtual private networks and password protected systems that ensure our client’s information is completely protected. Our employees are carefully recruited and thoroughly trained to ensure that they are only comprised of principled and trustworthy individuals.
5: Dependence on third-party financial well-being.
Outsourcing is a partnership meaning that when you take it up you will be handing over a part of your business to the third-party vendor. This in return means that you will be tied to that party’s financial well-being.
Solution: Carefully asses your outsourcing partner’s finances before banking on them. Check their previous track record and review their testimonials. You can tell a lot from their past work and reviews.
6: Quality of service/ quality control
A company might be worried that by outsourcing services from a third party vendor that is miles away they cannot be assured of quality. The other issue might come up as a result of the thought that third party vendors are solely motivated by profit and thus the only way to do that would be by cutting their expenses compromising product or service quality.
Solution: Make sure they meet the terms that are explicitly stated in the contract. Ensure that the contract clearly highlights measurable processes for quality service reporting. Also make sure that service levels are not left out of the contract in order to cut costs. At Adept we ensure that all the terms of the contract are included in our very detailed Service Level Agreements with our clients.
7: Language barrier
Many companies tend to outsource to offshore areas that speak a different language. For outsources services such as transcription this may pose a challenge due to speakers having strong accents.
Solution: Third-party vendors should ensure that their employees (read transcribers) are well versed with the different accents of the countries. At Adept our transcribers are well-trained and well acquainted with several accents which ensures issues regarding lingual accent variation do not arise. They include but are not limited to American, British, Chinese, Arabic, Indian, Canadian and French accents.
8: Hidden costs
The contract signed between a company and the third party vendor normally covers the details of the products and services that will be provided. Should anything fall through the crack and is excluded from the contract the company ends up catering for the extra charges.
Solution: Make sure that every expense is covered in the contract and in detail. Also state possible eventualities to avoid covering additional charges. At Adept we make sure that the contract is detailed in terms of covering the agreed service charges and any other eventualities.
9: Poor communication.
This might just be the biggest worry about offshore outsourcing or just outsourcing in general because of the physical distance. Miscommunication might arise both when there are issues to do with language barrier and also when there are no language barrier. This might be as a result of inconsistent, infrequent or total lack of communication.
Solution: The key to solving communication issues is maintaining consistent and frequent communication. Should either party have an issue it should be immediately communicated to the other party. At Adept we strive to provide seamless communication through and have put in place measures such as a well established chain of command and escalation procedure to follow for when any issues arise. Our employees are also thoroughly trained on effective communication skills to ensure that open communication lines are maintained.
Do you know of any other possible disadvantages of outsourcing and have an idea on how to solve them? Leave your comment below.