Outsourcing is an excellent way to cut operating expenses, but it is not a perfect tool. Businesses have reported having problems with their offshore teams due to poor quality work, frustrating delays and long hours at the office. Challenges from outsourcing include lack of communication, higher than expected costs and quality not matching expectations. However, by implementing the right solutions outsourcing can be a major productivity tool without significant drawbacks.
Miscommunication tends to arise for two reasons: Infrequent communication, and misunderstanding between the offshore team and the business. Therefore, offering offshore teams multiple communication methods helps significantly. Businesses should provide different communication methods on different methods, this way, they still have a method of keeping in touch even if one medium fails. For example, if the internet fails, your offshore team can communicate via phone lines.
Solving communication also means making sure communication is frequent. Miscommunication arises when offshore teams and companies rarely communicate. The best way to address this issue is to establish regular communication, for example, having a meeting at least once a week. Frequent communication gives companies the chance to clear misunderstandings and solve problems before they become serious errors.
Quality not matching expectations
One of the biggest problems of outsourcing is quality not meeting expectations. Sometimes businesses overpay an outsourcing company only to be disappointed with the work they got. The best way to mitigate this problem is to ask for references before hiring the outsourcing company. Businesses gain a lot of insight into how the offshore team works with a sample project.
Costs are higher than expected
Businesses can keep outsourcing costs under control right at the get-go. Many outsourcing companies ask for 50% as upfront payment. Paying 50% is not a recommended strategy, especially if the business and the outsourcing firm are working together for the first time. Instead, businesses should go with the resource augmentation methodology, this way businesses do not have a massive investment in the project and can pull out of the project if they want. With resource augmentation, you can do whatever development is required whilst paying only for the resource that are being used and billed at the end of the month. There are also no constraints as you would get in a Fixed scope project allowing as many amendments as required to make the software suite you’re each and every need.
Working with outsourcing company comes with its challenges but by incorporating the above solutions and planning outsourcing operations in detail, you can negate many of the negative aspects of outsourcing to add business value and cut operating costs.