Last Updated on March 15, 2023 by Minerva
Do you know? 59% of companies use outsourcing to cut operating costs!
Over 123 billion dollars were spent on outsourcing globally in 2021 and the sector isn’t showing any signs of slowing down.
While there are various reasons why a company might outsource its operations, cost-cutting has always been the primary driver.
Outsourcing has many advantages, but like sides of a coin, it also has a few drawbacks.
Let’s discuss five main outsourcing challenges and, more importantly, how to solve them.
What is outsourcing?
Let’s first define outsourcing before talking about its difficulties. Outsourcing is when a company hires an outside entity to handle some areas of its business.
In other words, one company hires another to operate a portion of its activities. For example, Apple outsources the majority of its production to Foxconn, which assembles many of its goods, including the iPhone.
What are the common challenges with outsourcing?
Challenges of outsourcing Project Control
Control over the project is the primary obstacle to outsourcing.
You won’t work with your internal team when you outsource the software development process to a third-party vendor; instead, you’ll work with an outside business. This means that you are hiring a contractor rather than an employee.
There’s a chance you have little influence over the project’s workers. Maintaining control over the entire project can be a little difficult for you. It’s because the working team is located outside of your office.
Solution: The simplest way to deal with this difficulty in outsourcing software development is to specify in the outsourcing contract how much control the outsourcing company’s staff will have over the project.
Employees of the company seeking outsourcing services as well as the vendor should have a full understanding of the conditions of the service contract.
Lack of Outsourcing Experience
It may be difficult to get started when working with someone or on a project. The workflow, common concepts, and recommended practices are unfamiliar to you.
It might be challenging to communicate your idea to a different group of people, especially if you have never worked with them before.
Solution: Select a skilled source. A knowledgeable partner will guide you through the procedure, assist you in avoiding delays, and help you avoid any risks.
So, they will assist in requirements analysis, the discovery process, and the selection of the most qualified candidates.
At Minerva Infotech, we put a lot of effort into understanding your company’s demands, requirements, and what can produce a greater ROI. We also aim to identify any risks or potential pitfalls and encourage you to start small and keep growing.
Communication challenges in outsourcing
Companies that are new to outsourcing find it challenging to keep open lines of communication with their outsourced partner.
And also Language and cultural obstacles greatly increase the chances that you won’t be able to communicate with your outsourcing vendor.
And One of the most frequent outsourcing challenges that businesses face that might occasionally result in lower-than-expected project delivery quality is the communication barrier.
Solution: Setting proper business hours for communication can help minimize the communication gap.
By using efficient project management tools, you may establish a standardized communication format. It can be improved by establishing suitable escalation processes.
ALSO READ– 5 QUESTIONS TO ASK BEFORE DEVELOPING A WEBSITE
Data Security
No matter how big your company is, whether it is a start-up, a local company, or a corporation, complete data, and IP security are essential.
When you collaborate with a third-party outsourcing partner, outsourcing carries many challenges regarding the data.
The protection of intellectual data such as business plans, trade secrets, etc. is of utmost importance to the organization. It’s because improper data management could result in the loss of produced applications or their rights.
Solution: The only method to prevent these outsourcing issues is to create a contract with a non-disclosure agreement. Also the service level agreement, as well as to evaluate the company’s security protocols and data protection system.
Hidden Costs
The primary goal of outsourcing is to achieve a competitive advantage over having an in-house staff to handle non-core business functions.
Always check the cost estimate of your in-house team with the pricing offered by the vendor before selecting a vendor.
In many cases, there are additional costs such as redeployment, troubleshooting, software upgrades, and so on that were not previously considered. All of this can add up to a problem with your first budget.
Solution: The best approach to reduce outsourcing costs is to speak with the vendor and request a transparent cost estimate before finalizing the agreement.
You must clearly specify the outsourced project requirements. Then the vendor can provide you with an accurate cost estimate for the outsourcing process.
Conclusion
The points discussed above are the key challenges with outsourcing; if you are new to outsourcing, you will almost surely encounter some difficulties. That is why it is vital to choose a trustworthy outsourcing partner.
A reliable outsourcing provider has a large number of case studies to demonstrate their experience, and positive client feedback. Also, they have a committed staff of specialists that will walk you through each stage.
Contact us if you are looking for a full-service web design and development provider for your company. We will assist you in streamlining your project priorities and ensuring a smooth implementation.
CONTACT US
Call – +91 8100 665964 (INDIA) | +1 720 738 1011 (US)
Email – hello@minervainfotech.com
Skype – minervainfotech
