Outsourcing is a popular choice for various industries, especially IT as it helps to enhance the overall business processes and functions, and brings more revenue to the firm. Outsourcing is largely used all over the world.

Outsourcing IT solutions can enhance your organization’s infrastructure. A good service provider would make available certified technical and network support professionals, and the resources and expertise to overcome any IT challenge your organization faces.

10 Key Outsourcing Mistakes Made By Entrepreneurs

However, if your outsourcing practices go wrong you are most likely to damage customer relationships, and sometimes even ruin your business.   Here I have discussed the seven most common outsourcing mistakes, and how to avoid them: 

The time difference with the United States counterparts: The 12-hour difference with MST (Mountain Standard Time) makes it very difficult for remote workers to coordinate. Most often it turns out so, that the technical team in India is all set to leave for the day when the US team wants to discuss the technical details.

Or, your developers in India, have just begun their day, but it is still a Sunday for the project team in the US. Though time differences are no big obstacle today, with cloud applications in use and work-from-home options for remote resources, the time difference is still a pain in the neck, for smaller outsourcing vendors.

 The pyramid of salaries = inexperienced developers

Most Indian consulting firms are infested with layers and layers of good managers while the quality of their developer pool is very pitifully low. Their best resources are visible during the sales process but are not available for projects, most of the time. The success of a software project depends largely on the quality of the code produced.

It is very difficult to find talented developers older than 28. Most developers lack true business experience. The key to good software is having developers that can think abstractly in terms of framework and patterns; this thinking process takes years to develop.

High Attrition rates: The attrition rate is notoriously high in India in the BPO and KPO environments. This impacts productivity and business outcome, entrepreneurs fail to build in-depth corporate, client, or product knowledge within the Indian teams.

High attrition rate results in poorer service and increased costs. Highly educated, ambitious, enthusiastic resources like to thrive in a stimulating business environment with immense growth prospects.

Employers often find it difficult to retain resources that are hungry for higher pay or growth opportunities. Enterprises must have policies and processes in place to counter the attrition issue.

 Lack of initiative: One of the commonest issues that cause outsourcing failure is that the US counterparts rarely show any initiative. Indian resources often receive only partial instructions and they then do precisely what has been asked of them, and needless to say, this falls short of the home teams’ actual expectations.

Both sides need to look into this. Failure to address this issue contributes to building inefficiencies.

Over-assumptions – The home teams live with the assumption that their Indian colleagues will somehow automatically understand the way things work in the West, what client expectations are in the USA, how a product line fits into a wider supply chain etc.

What they refuse to understand is that they have never been to the States or have no previous knowledge of the industry.

The average age of workers in the BPO and KPO industries in India is around 27 years old. Though technically very capable, talented, and enthusiastic they are not necessarily commercially astute.

Therefore, enterprises should not just train people on technical, process, and product issues, they must also look at their commercial development as well.

Putting all your eggs in one basket

Do you only have one vendor or supplier for a critical supply, product, or service? Outsourcing should also be looked at in the same way. imagine your outsourcing partner unexpectedly going out of business.

Or if your activity spikes and your partner is unable to handle the workload. Most enterprises make the mistake of putting all their eggs in one basket. They do not have the redundant capacity or a concrete plan to cover a variety of “What if?” situations.

 Not having a well-defined exit strategy: Every outsourcing agreement must include criteria for disengagement: Failure to meet standards, failure to maintain sufficient capacity, or simply how and when you can disengage if outsourcing has not paid off in terms of cost or time savings.

Unfortunately, most Indian outsourcing vendors do not have well-defined SLAs in place.

  Do you know of any other outsourcing mistakes to avoid? please share in the comments below.