The Three Most Common Outsourcing Mistakes

Lost in much of the public debate about offshore outsourcing is the actual process of transferring business operations to a third-party company outside the U.S. It's time consuming, complex and fraught with peril. Fortunately, most companies make the same mistakes. 1. Most companies woefully under invest in the ongoing governance and management of the service provider relationship and underestimate the time, money and people it takes to manage far-flung operations effectively. The savings won't be as great, but companies must invest in overseeing the partnership for the long term. This includes establishing a dedicated team of people, on both ends, to ensure compliance and adherence to agreed-upon service levels. 2. Before deciding on a country or service provider, first determine the cost of running your business processes and what your objectives are. If your service levels and costs are already competitive, it won't make sense to farm it out. Study the expertise of each potential partner, considering proximity, costs, cultural and language barriers, telecom infrastructure and tax laws among other factors, before making a decision. India will not always be the right answer. 3. Before deciding on a country or service provider, first determine the cost of running your business processes and what your objectives are. If your service levels and costs are already competitive, it won't make sense to farm it out. Study the expertise of each potential partner, considering proximity, costs, cultural and language barriers, telecom infrastructure and tax laws among other factors, before making a decision. India will not always be the right answer.