Outsourcing, in its fledgling state was easy to understand and adopt. A major shift happened when cost cutting alone ceased to the raison d’etre for the business model. While cost reduction remains a major benefit, other reasons like the ability to transform capital expenditure into a more beneficial operating expenditure, access to the latest in technology, a wider skill base and skill set and expertise make the adoption of outsourcing so much more viable. The ability to focus all in-house resources on core tasks alone is a major benefit that small business owners stand to gain from the process.
Rethinking the off-shoring idea
Thinking about outsourcing in the terms outlined above will often lead business owners to avenues in their own businesses that can potentially benefit from the process of farming out tasks. The entire value of organizations can potentially increase manifold with the focus that can be gained from concentrating solely on core tasks.
Common errors with the adoption of off-shoring
When owners find problems with some avenues in-house most seem to look at sending the processes to off-shore locations in the hopes of finding answers. A problem in any other location is still going to be a problem. Business owners should try resolving and identifying the issue correctly before sending it away to off-shore locations.
Service providers of value will often point out the issue and ask business owners to review them either during the bidding process or the RFP. They will in fact insist that the issue be wholly resolved before retendering. In the hopes of winning business, some partners might look to take on the project as a calculated risk. This should however not be accepted as both parties are aware of the unresolved issues. When such flawed contracts are accepted it will only cause inevitable delays and contractual issues that are beyond complex and bigger issues in the future.
Such contracts that are flawed from the very beginning turn many away from the off-shoring model entirely. Done the right way, the model is a sure fire way to add irreplaceable value to any organization.
Choosing the right partner
Like with online shopping, choosing a partner after only a few business calls, sales meetings and case studies can be a hit or miss situation. Visiting the operations, witnessing their environment and talking to the team that one will work with is the best way to choose an outsourcing partner. Choosing an off-shore partner is much the same as choosing an in-house employee. Both should be done with careful scrutiny and observation.
Sometimes partners are chosen for small projects, as a test for bigger and better projects between the same partners. Then the off-shore company is solely chosen on the basis of cost reduction. The location of the company is often either in Asia or Eastern Europe. Given, the distance and the time zone difference, the communication between both the parties becomes more and more scant and erratic.
The problems raise their ugly heads only once the delivery is returned with very obvious errors that could have been easily avoided with ample and accurate communication. When the communication precedent is scarce, the follow-up communication is bound to be broken. Therefore, the project is very often re-done or scrapped and started fresh in-house. This means that businesses incur twice the cost to no avail. The delays and the high costs is then easily blamed on the flawed model of outsourcing. The main issues of lack of communication and the arbitrary selection of the service provider is not addressed.
While the off-shore business model might not work for everybody in every scenario, it is worthwhile to give the model its due. Outsourcing can work out to be advantageous for both parties involved, however it should be accepted as an avenue that demands adequate time and attention from the business owners as well as the service providers.