5+ Pitfalls of Outsourcing and How to Avoid Them

As your business grows, it may be difficult to build your internal infrastructure quickly enough to meet its needs. Looking for help outside your company can ease the burden on your company while offering quality service for your customers. The benefits of outsourcing outweigh the risks if you understand the process & avoid the outsourcing pitfalls.

What are The Pitfalls of Outsourcing?

Don’t let feelings of urgency prevent you from making the best decisions for your company. You may end up in a situation where you are causing internal problems while spending more instead of cutting costs. Keep a clear head, and avoid these common outsourcing pitfalls.

1. Hiring Without a Plan

Find areas where your company’s growth is inhibited by a lack of staffing or resources. When done correctly, outsourcing will help your business grow without sacrificing the time, energy, and money needed to build internal infrastructure.

How to Avoid:

Make sure you understand what functions you’d like to look into, like call center outsourcing, as well as how much you can afford to spend before hiring a service.

2. Outsourcing Core Competencies

Along the same lines, you don’t want to outsource what makes your company unique. After all, part of the point of outsourcing is allowing you and your employees to spend more time on each of your specialties.

You don’t want to pay a lawyer or engineer to answer the phone all day instead of working on revenue-driving projects. Conversely, you don’t want to move your main revenue and strategic projects outside of your office.

How to Avoid:

When deciding what functions to outsource, look for activities that take up the time of employees you’d rather have working on more specialized projects.

3. Committing Too Quickly

When looking for a new employee, do you hire the first person who shows up in a nice outfit and claims they can do the job? Probably not. You likely screen through many resumes before selecting a few promising candidates to interview.

How to Avoid:

Don’t fall for the first flashy commercial with outlandish promises you see. Take note of your priorities, and look for a company that meets your business’s needs. Pay attention to past customer reviews, company culture, and specific service offerings.

4. Undefined Expectations

Both parties should understand each other’s expectations. Discuss important topics like deadlines, expected quality, communication with customers, processes (and associated fees) for additional services in the future, and more. Make sure your contract outlines the next step in the event that expectations are not met on either side.

How to Avoid:

Set clear definitions and expectations that allow outsourcing companies to meet or even exceed the standards you desire.

5. Failure to Communicate

Communication shouldn’t end as soon as a contract is signed. In fact, it should increase. After all, in order to create a long-term partnership where both parties are aligned on goals and expectations, communication needs to be regular and clear. Ample communication also provides more transparency for both teams.

How to Avoid:

Keep the channels of communication open, as this will help both parties avoid unnecessary confusion and frustration. Provide and request regular feedback.

Follow up all verbal conversations with a written record to ensure stays on the same page throughout the process.

6. Outsourcing Cost vs. Value

It’s important to consider the value of outsourcing before evaluating the total cost. Many companies look for the most inexpensive third-party vendor before considering the true value their services might add to the company.

How to Avoid:

Before shopping for third-party vendors, ask yourself: How much time might I save by hiring this company? What will I be able to do with my time instead? What is the true worth of outsourcing?

Create a list of your top priorities before shopping for third-party vendors, then make sure the vendor you choose matches up with your needs. If they do, the return on investment will be well worth the cost.