Outsourcing is now one of the most important competitive strategies for successful business operations that are used on a long-term basis. Outsourcing allows executives to kill two birds with one stone — concentrate on their core responsibilities and control expenses.
However, not every outsourcing strategy is successful. Here are 7 outsourcing failures companies struggle with and how you can avoid them.
#1 Why are you outsourcing?
If you haven’t asked yourself this question, you’ve made the first mistake. Outsourcing just because it’s a major trend or your competitor is doing so isn’t a reason. Familiarizing yourself with the benefits outsourcing offers and figuring out if these benefits are exactly what your business needs will help you to create the right strategy.
#2 Not defining scope and goals
Another reason why outsourcing fails is the absence of scope and goals. Clear specifications will help your outsourcing team choose the right approach and methodologies regarding your project. Vague and unclear goals will make it difficult for your vendor to meet the requirements and provide a satisfactory outcome.
If you find challenging to write specifications, don’t worry, an experienced software development company will help you with this if you manage to explain your idea in detail. An outsourcing company will ask you a ton of questions regarding your project goals, requirements, and expectations before the project is under development.
#3 Choosing the wrong vendor
How would you know if the vendor you are going to choose won’t let you down? Partner with a software development company that not only has experience working with your industry but also shares your company values and understands your business goals as well as you do.
First, pick four or five promising companies to choose from. Look through the services they provide, industries they work with, benefits they offer, and feedback from their previous clients. Learn about their values and culture to see if you can both work towards similar goals. After that shortlist vendors again.
Then, set up a meeting with the companies’ representatives and ask several questions to figure out if they are ready to commit to your project, what is their expertise, and if they can solve your pain points. You can also ask for the CV of developers or designers to review their skills and pick the best talents.
#4 Focusing on cost rather than value
We’ve all heard the phrase “buy cheap, buy twice”, and we know it’s true. It’s no secret that many businesses choose outsourcing because of the lucrative prices.
By setting the priorities right and focusing on the value rather than the price you can find a decent team of developers for a good price.
#5 Not signing up a contract
One of the most significant IT outsourcing failures is the absence of a contract. Why should you always sign a contract while outsourcing? Сontract holds both parties accountable, clarifies expectations, builds a professional relationship, and describes responsibilities.
A contract must cover all of the details regarding your future project. By clarifying the scope of work you will be able to avoid situations when someone shifts their responsibilities into the other party or looks for excuses to provide a poor outcome.
#6 Ignoring your in-house team in the process
Whenever you start outsourcing, your company will change in management and organization. To prepare your in-house team for extension and “different time zones” mode, explain to them why you chose to outsource and why it will be beneficial for you and your team.
You can also hold a meeting to familiarize your in-house team with the management tools and collaborative software you are going to use to communicate with the remote workers.
#7 Not having a communication model
Communication lies in the foundation of cultural difficulties. If the communication doesn’t work you just can’t go in the one direction. Ultimately, you cannot reach successful outsourcing results.
One of the key elements to overcoming some of the communication obstacles is communication channels. Using a variety of communication tools will help you to stay in touch with the team via messaging or video conferencing.
Having a regular meeting with a remote team helps to move through the process smoothly without bottlenecks and following up ensures that your team knows what you expect from them.
All in all, it’s impossible to discuss every detail beforehand, however constant communication will help to avoid misunderstandings and reach the desired goal.
What should you do now?
May these top outsourcing failures never stop you from achieving success in your project development. Outsourcing is a great idea and we encourage you to find your offshore partner and start moving towards your bright future.
inVerita is one of the outsourcing software development company that can help you in this process and provide you with top-notch software engineers. Message us to book a call with our representatives today.