5 most common outsourcing problems & how to cope with them

The era of globalisation turned outsourcing into an obvious solution for coping with demand, budget and time restrictions. Many companies choose it for reducing their costs, while increasing the efficiency and flexibility of their operations. Outsourcing became a global strategy for contracting out important functions to experienced and specialized agencies. However, some difficulties may occur during the process. Let’s look into what are the 5 most common outsourcing problems and how to overcome them.

1. Lack of trust

Giving out and taking on an expensive project requires trust from both sides of the partnership. Therefore, one of the most common outsourcing problems is lack of trust and it may take some time to build it. Usually, both sides can feel and experience the risk. Firstly, the company is unsure whether all of the arranged conditions will be met including costs, time and requirements. Secondly, the outsourcing agency may not have enough trust whether the payments are going to be on time or if their client may withdraw at the last moment. By having less time to react, the agency may not be able to substitute the project, thus, it will experience many disadvantages. In any case, starting a new business relationship hides potential challenges which should be carefully examined before the beginning. 

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SOLUTION: Yet, trust cannot be guaranteed except by having previous work relations, or heavily tight contracts. These will ensure a more certain and positive outcome of the project. Another option is to arrange daily or weekly meetings between the two sides in order to maintain control over the execution.

2. Cultural challenges

We cannot pass by this topic without mentioning some of the cultural challenges that may occur during outsourcing. The general practice is that Western companies outsource to Eastern ones due to lower wages and higher competencies of the latter ones. Of course, there may be other reasons for outsourcing, yet we found these to be the most common ones. In the process, some cultural differences may take place. These include problems with communication mainly due to language barrier and/or different time zones. In this case, the collaboration could be inconvenient for both parties, since their communication will be disrupted. Besides this, the work style of the two companies should match for optimal results.

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SOLUTION: Our advice is to select an outsourcing agency that matches your company’s values. Further, the difference between the time zones should be no greater than 6 hours for a more convenient work process. Overall, selecting a more high-quality agency would be more beneficial than trying to save on even more costs. For instance, it would save some headaches regarding the communication and end result of the project.

3. The agency that you want to hire is too busy.

It is a well-known fact that usually the best in their league have their agendas full for months ahead. It is the same even with other professions, for instance, hairdressers or therapists. They cannot take someone right at the spot because they are fully booked and putting less attention to their current clients is not an option. But, why does it happen like that?

Firstly, due to their fame as the best agency out there. Another reason is their well-known capabilities and the trust they have built among their clients. Also, returning customers that have been satisfied with their services is definitely not a taboo event in their case. Another difficulty may be due to lack of skilled labour at the moment. Maybe they didn’t manage to cope with the increasing demand, thus, they didn’t hire more employees. There may be many reasons behind why an agency cannot take on your project at the moment, but the point is what can you do about it.

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SOLUTION: A way to cope with this problem is to plan ahead the project and contact your desired company earlier to ask for their availability. Another variant is to find another agency, yet, it hides more risks. Therefore, planning ahead is usually necessary for the success of a project.

4. Freelancers vs. Agencies.

Once you decide that you want to outsource a part of your business, the choice between a freelancer and an agency is the second one to be made. The selection is depending upon the task complexity and size, as well as the availability of the selected parties that you have put an eye on. On one hand, freelancers may multitask between side hustle and a full-time job, thus, they may not be reliable partners. To commit fully to freelancing, they have to have their agendas full of worthy projects, considering time and rewards. Meanwhile, agencies put way more emphasis due to “having multiple minds on hand”. Full commitment is truly necessary for the success of every project.

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SOLUTION: We advise to select bigger agencies rather than freelancers, since they have a more proven track of past projects. More you can read in our upcoming article: “Outsourcing to freelancer vs. agency”.

5. The size of the project.

Last but not least, we have to discuss the size and complexity of a project as a possible obstacle, while outsourcing. A common practice for some agencies is turning down smaller projects due to not being considered as well-paid. Usually, they prefer to dedicate their time and focus to a more sophisticated order which will bring them more benefits. However, there are some companies that either want to first try out the services, or have a really small problem, yet necessary to be solved.

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SOLUTION: Gladly, CodeMerx is up for coping with projects of any complexity type! So, if you feel in such a situation, better look for another agency than giving up on outsourcing and losing the benefits of it. 

Some of these common outsourcing problems can discourage businesses of using this strategy. Yet, many well-known companies such as Nike and Microsoft have been taking advantage of outsourcing to drive their business through success. Thus, considering it as an option when having less resources is essential for staying relevant on the market. It is a powerful strategy for business development, yet it hides some challenges that every company should be aware of. Usually, these depend upon the project specifications and the selected agency’s background. Therefore, when researching options for outsourcing, these two factors should be carefully considered before making a decision. Fortunately, we have presented you with what tactics you can use to cope with the most common outsourcing problems.

Stay tuned for more articles about outsourcing, software development and IT business.

You can read more about Benefits of Managed Services.

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