How to Avoid Outsourcing Failures

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QArea Team
QArea Team Marketing Manager
August 2, 2012
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Offshore outsourcing has become an integral part of those IT companies which strive to deliver a first-class service as well as to make profit. Outsourcing gives companies the competitive advantages in the forms of cost saving and productivity level enhancement. However, insufficient strategy planning or misunderstanding of outsourcing objectives can lead to a number of mistakes and failures. In this article we would like to tell you about the ways to mitigate or avoid outsourcing failures depending on the reasons they were caused by.

1. Different cultures: difficulties in adapting to your outsource provider can be caused by differences in the style of governance, problem solving or value system. It could be of no consequence until it doesn’t affect your customers.

Solution to problem:

  • First try to close cultural gaps between your companies and to find a common ground.
  • Analyze the provider’s company and country of residence beforehand.
  • Run a pilot to make sure this provider is compatible.

2. Your internal employees feel insecure: outsourcing may cause the situation when your onsite employees feel insecure and unsure of their jobs. It can lead to insufficient cooperation between your offshore and onsite teams and, as a result, low productivity and business activity levels.

Solution to problem:

  • Communicate with your employees and explain their rights.
  • Rest the rumors.
  • Before starting to outsource give your onsite team different responsibilities and align them to corporate principles.

3. There is a risk to your intellectual property rights: some offshore companies may act illegally in relation to you confidentiality or intellectual property rights.

Solution to problem:

  • Always choose offshore providers who have already established legal and security infrastructure.
  • To make sure that your provider will not act illegally you can check up ISO: 270011, which contains the list of certified providers.

4. You have outsourced wrong functions: poor performance might be caused by you hasty choice to outsource core functions to the provider you have never dealt with before.

Solution to problem:

  • Always try to start with outsourcing non-core functions and non-critical components.
  • At the beginning make sure to control and to assess the performance at each stage of your project execution.
  • Don’t expect increasing of your profit and corporate productivity immediately.

5. Work is poorly documented: your onsite development team can hardly cooperate with offshore team until their cooperation is not well documented.

Solution to problem:

  • You can release your requirements concerning documenting as soon as the interaction between developers become closer.
  • Avoid starting new outsourcing projects which are not well documented.


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