5 Common Outsourcing Errors to Avoid for Your Business

5 Common Outsourcing Errors to Avoid for Your Business

A healthy, overflowing order book is a cause of celebration, right? It’s a sure sign that you have a profitable, growing business, and your company’s outlook is rosy.

That’s the theory. In reality, a busy workload creates all sorts of pressure and stress on a growing business. But there is a solution, and that’s outsourcing.

If you haven’t tried outsourcing for your business yet, it’s certainly worth your consideration. But before you take the plunge, take a browse through these five common outsourcing errors. 

1. Outsourcing Core Competencies 

Your core competencies are the unique skills and experiences that help your business grow. They might also include those business areas that drive your most significant profit margins.

Keep that skill in-house when something is performing well for your company or providing a competitive advantage.

Instead, focus your outsourcing efforts on business areas that are important but peripheral, where an outside organization will add more value than your internal team. Employer of Record services might help with your needs. These kind of services allow companies to outsource hiring,recruitment and payroll even overseas in more than 80 countries.

Outsourced med USA billing is an excellent example of external support making more sense than internal management.

2. Not Setting Quality Standards

An excellent outsourced business will deliver quality. But that doesn’t excuse you from setting quality standards upfront before signing an outsourcing contract.

There are two reasons why this is important.

First, you will set the right expectations from the outset. It’s far easier to improve quality standards if your contractor knows what you want rather than trying to raise standards retrospectively.

Secondly, having a quality process in place will help you predict and avoid problems. That’s particularly important if you outsource a service that interacts directly with your customers. 

3. Focusing Solely On Cost Reductions

Outsourcing might help improve efficiencies in your organization.

But don’t confuse that with cost-cutting or think that the assumed low cost of outsourcing is a good strategy for your business. It could lead to more problems (and expenses) in the long term.

Instead, think of outsourcing as an investment. It will help you get the right experience and expertise and enable your team to focus on the highly profitable aspects of your business. 

4. Not Managing Your Outsourcing

It’s tempting to think that outsourcing tasks mean outsourcing problems. Sadly, that’s not the case. Outsourcing requires any business to oversee and manage that external contractor actively.

Assign someone in your organization the task of managing contractors. Ensure they are regularly talking to outsourced staff.

They will help ensure work is on track and proactively manage risks before they become critical business issues.

5. Having Unrealistic Timeframes

Contractors might indeed help you speed up an urgent project. But that doesn’t mean you can start with overambitious timescales. Always consult with your contractor first.

When a third-party contractor provides estimated timescales for work, trust their judgment. Those estimates will come from years of experience, and they will be accurate, even if they aren’t as fast as you would like them to be.

Avoid These Five Common Outsourcing Errors

Using external contractors is strategically intelligent, but only if you can avoid the most common outsourcing errors. These five tips will help you get the most out of outsourcing and minimize the risks.

For more information on the benefits of outsourcing, head to our business section for our latest articles.