4 Common Outsourcing Mistakes and How To Fix Them
“Do what you do best and outsource the rest” – Peter Drucker
If you currently outsource, you have probably come to understand that certain tasks are better off left in the hands of professionals to limit the amount of unnecessary headaches they can create for your business.
Business Process Outsourcing (BPO), for example, may be the key to help you build a leaner, more efficient and competitive business, by providing you more quality time to focus on your main value drivers. However, there is always room for improvement, so it is important to avoid making the following mistakes in order to truly get the most out of your outsourcing relationships:
1. Outsourcing all customer-related functions
Some companies outsource all customer-related functions in efforts to cut costs, however, resolving complaints, sales, customer service, answering calls and/or emails are vital functions that are better kept in-house.
2. Lack of guidance
Outsourcing is most efficient when the processes are defined with guidelines, procedures, and rules. It is a common mistake to not provide adequate guidance for your outsourcing partner. This should be taken into consideration as you would your in-house processes to avoid any misunderstandings and ensure your satisfaction. Unclear contractual issues, changing requirements and unforeseen charges are matters that can neutralize the flexibility BPO is designed to offer.
3. Not gauging performance
Since outsourcing literally takes processes out of sight, sometimes those processes become “out of mind” as well. Periodically measuring performance will help adjust any necessary functions. Once again, expectations should be clear in writing, and standards should be defined beforehand in order to be able to corroborate. Trust your partner, but always verify.
4. Outsourcing too much or not enough
Some entrepreneurs get outsource-happy and begin outsourcing everything and anything they can in an attempt to cut costs. There’s also the other exterme, where some companies just don’t outsouce enough and are burdened with unnecesasry problems. Ideal outsourced tasks should be outside the company’s core competency, specified in detail, and managed with quantified deliverables and checkpoints.
One of the areas you should definitely consider outsourcing (if you haven’t already) is Human Resources:
- For startups, outsourcing is a great way to save money by avoiding the costs of hiring employees that may require work space and benefits.
- Temp agency workers may also be a solution your company could benefit from at a certain point.
- For bigger businesses, personnel issues can take a lot of time, and involve complicated procedures such as compensation, benefits, payroll, policies, and training. Most HR processes are highly detailed and include legal aspects, and therefore better off left to the trained professionals.
Just as important as choosing what and when to outsource, is who you choose for your outsourcing needs. BPO done right can mitigate the risk of lawsuits and claims and enhance your company’s flexibility by allowing you to focus on core competencies, instead of non-core administrative processes, allowing you more opportunities to build and enrich your firm’s core businesses.