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5 Biggest Outsourcing Mistakes and How to Avoid Them

5 Biggest Outsourcing Mistakes and How to Avoid Them

The world today is technology-centric, and every organization implements and relies heavily on some form of technology to be able to do business. Some organizations leverage technology to be able to provide non-tech services, for example, a law or auditing firm that relies on their email servers to transact deals, while some organizations directly provide tech services, for example, a server hosting company. Either way, it is quite evident that technology forms the crux of every organization, irrespective of their services, and this makes one particular department a crucial one – the IT department.


Over the years, companies have realised the need and benefits of outsourcing. Effective outsourcing strategy can help companies to grow from small teams to large organisations in an efficient manner. Outsourcing is utilised as a strategy for a few reasons:

 


It is quite evident that outsourcing plays a big role in today’s business world, and as an organization, leveraging the benefits of outsourcing is often the smarter route.

The Downside of Outsourcing

However, there are a few pitfalls to outsourcing, which need to be weighed in by organizations before outsourcing any services:

Fortunately, the risks of outsourcing can be mitigated by creating a strict process, defining SLAs, and maintaining strong legal contracts. This brings us to the most common mistakes companies make when outsourcing:

5 Mistakes to Avoid When Outsourcing Services

1. Providing the Outsourced Company Complete Autonomy

Although professional, an outsourced company might not have the same drive and dedication as your organization does towards your services or product. Organizations sometimes make the mistake of outsourcing a set of services completely, providing all responsibility and accountability to the outsourced company. This often results in subpar results.

2. Losing Visibility and Control of Services

Outsourced companies follow their own processes and working model to deliver services and products. When your team is not involved in the loop, you can lose complete visibility and control of the tasks and deliverables.

3. Communication and Requirement Gap

There can be a communication, culture, and time zone difference between your organization and the outsourced company. This can lead to unclear translation of requirements, and it is important to ensure the deliverables are clearly understood to avoid receiving wrong results. Time zone differences can lead to delayed results, as one team is always waiting for information from the other.

4. Misalignment in Strategy

When services are outsourced, the priority of deliverables can be compromised. You might have a set timeline and order of releasing deliverables. If your strategy and that of the outsourced company do not align, the service or product will suffer.

5. Missing a support strategy

More than often, outsourcing is utilised as a temporary solution rather than a strategic path to fuel growth and provide better services or continuous growth. This can lead to a broken transition or a product that doesn’t actually deliver desired results in a long run.

 

Ideal Requirements From an Outsourced Team

1. Increased Work Time Overlap

Outsourcing services to a company in a different time zone should ideally lead to increased online hours. However, it is important to ensure there is a time zone overlap so that there is a seamless transition of information from one team to the other.

2. Control Should be Retained by the Parent Company

While services and responsibility can be handed over to the outsourced team, control and visibility should be maintained by your organization. This ensures that the services are moving in the right direction.

3. Define a Clear Strategy

The service strategy set by your organization and the outsourced company must align. Defining clear processes, SLAs and deliverables is key to maintaining proper services.

4. Quicker Communication

By taking certain steps like overlapping work times, you can ensure that there is constant and clear communication between the parent and outsourced company. This becomes critical when services and products rely on feedback from both teams, in order to avoid time wasted to to lag.

5. Support and Maintenance strategy

Rather than seeing outsourcing company as a separate or temporary team, notion of one team and long term sustainability can be ingrained as a culture by having support and maintenance contracts in place. This can really enhance the delivery quality as well as product effectiveness.

 

The Solution to a Mistake Free, Ideal Outsourced Service

Understanding the mistakes organizations make when outsourcing, and the ideal solution desired makes one thing clear: there has to be an open and strong bridge between the in-house and the outsourced company/team. This requirement has led to a hybrid combination of onsite and offshore team.

This essentially involves having a fully operational technical team, split into an in-house team and an offshore team working out of a different location. By controlling both teams, organizations get the benefits of an outsourced team while maintaining total control and visibility, leading to desired results.

 

Benefits of a Hybrid Onsite-Offshore Team

1. Increased Support Hours

By outsourcing the offshore team to a location that is in a different time zone as the onsite team, you can provide a 24×7 support mode to your customers.

2. Reduction in Cost

You can leverage the lower standard of living costs and material/infrastructure costs of the offshore location to reduce expenditure and costs.

3. Combination of Skill Set

You can take advantage of the different talent pools available in the two regions (location of the onsite and offshore team) to set up specific specialist teams.

4. Boosts Quality of Work and Productivity

Having two teams operating at different time zones and on different KRAs gives companies the advantage of being more productive. This allows the IT service company to run two operations simultaneously, thereby reducing execution time and boosting productivity. 

5. Business time onsite support

One of most common drawbacks of outsourcing to a different time zone is a lack of support and increased delay for critical issues. Hybrid model doesn’t only solve this problem, it provides a competitive advantage. By having technical team available in 2 time zones, it can cover technical support for longer hours or even 24×7 and speed up fix for critical production issues.

 

Should You Partner with an IT Service Provider Running on the Hybrid Model?

Companies today are already benefiting from the hybrid onsite offshore IT service model. The benefits of this model is quite evident. It increases productivity and eliminates miscommunication, so the simple answer is yes, you can benefit from partnering with a company that has both an onsite and offshore IT team. Contact us to find out how!

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