In the 1990’s, the concept of outsourcing was first introduced in the manufacturing industry. Today, outsourcing has ventured into a variety of business processes such as payroll processing and call centre support.
The reasons for outsourcing have remained the same, with businesses striving to increase efficiency, while saving costs. However, the myths associated with outsourcing have also stuck out through the years, leaving decision makers in business wondering whether outsourcing is worth the risk.
Understanding the misconceptions associated with outsourcing can help decision makers make informed decisions regarding delegating non-core business processes. Increased efficiency in organisations is a competitive advantage and shying away from outsourcing due to myths could be the reason why your organisation is lagging behind.
Misconceptions about Outsourcing
Loss of Control
Organisations fear losing control when delegating functions to an outsourcing service provider. Many believe that it is risky to delegate control of some business processes to another organisation.
How to Retain Control
Unambiguous service-level agreements (SLAs) and clear communication eliminate the risk of misunderstanding between the service provider and client. Full transparency on the processes, work distribution and results delivery schedule helps the client stay in control of their operations.
Additionally, prior to entering into a contractual agreement, decision makers should assess their potential partners strategies, reviews and compatibility with their business model.
Threat to Security
Organisations highly value data security. Outsourcing gives a third party organisation access to private and confidential information, with the risk of a data breach.
How to Secure Data
Decision makers in business must assess the outsourcing service providers commitment to preventing a data breach. Employees must be provided with privacy and security training, as one way to prevent a data breach is by being aware and able to identify suspicious network activity.
Service providers should also have a strict Information Security Policy, as well as a Confidentiality and Non-Disclosure Agreement signed between all employees handling sensitive data.
Occasionally, organisations fear outsourcing service providers may bring up additional costs that were not initially disclosed when the SLA was agreed upon.
How to Avoid Additional Charges
Opt for a transparent service provider that provides accurate estimates, with clear payment terms. Furthermore, ensure that your organisation agrees to the details of the project, as set out in the SLA.
Lastly, decision makers in business tend to worry about the quality of work delivered by a virtual team.
How to Manage a Partnership with an Offshore Company
- Choose a service provider working on a similar time zone.
- Ensure that the languages spoken in your home location are similar to eliminate communication barriers.
- Consider the learning and development training that the outsourcing service provider delivers to the workforce.
- Partner with an organisation that adopts the Impact Sourcing model. According to the Everest Group, impact workers value their job, hence provide excellent quality work due to high commitment levels.