common mistakes when outsourcing

Common Mistakes Business Owners Make When Outsourcing 


Building a successful business is an exhausting and prolonged process that demands contribution at each level. Competition in each sector is challenging, and hence, every company owner and members invest funds, time, and effort. Right decisions lay the foundation for the company’s success in the long run.

A large percentage of Startups fail to survive the competition. According to research, there are several reasons for the failure, of which the primary reason is no market need for such an offering. This could be due to the lack of a USP to attract customers. Also, lack of funds is another reason. Therefore, small business outsourcing is important to establish a niche market to be the leader.

There could be internal reasons also of which lack of effective business model and team expertise are few causes.

Crafting a Proficient Team and Cost-Efficient Outsourcing Services

Developing a team of knowledgeable and efficient professionals can be a challenge since hiring and training them involves the cost of hiring and training.

Also, when a company decides to build an in-house team, they need to have appropriate resources like office space, hardware, and software. For businesses that have limited funds, outsourcing services is a great alternative.

Read this article about growth hacking to boost your business growth.

Outsourcing – A Real Boon for Business 

Outsourcing has become a popular trend recently since there are several benefits. Therefore, they understand the aspects involved.

The teams are well-trained and with in-depth knowledge enabling them to handle issues quickly. In business, time is money, and companies that wish to stay ahead act proactively.

While few companies offer an array of services, some specialize in a particular segment, for example, IT, marketing, finance, payroll outsourcing services, etc. When a business decides to outsource, they should consider past assignments, client feedback, plans, customer support, etc.

This is necessary since several companies are offering the same services. Comparing the offering helps evaluate the company and then make the best choice.

Key Mistakes to Avoid when Outsourcing

When there are several offerings, businesses tend to make some mistakes while making a choice. This wrong decision hampers the growth and ultimately leads to a bad experience. Here are a few crucial points that should not be neglected when considering outsourcing:

1. Choosing a company based on pricing

Indeed, the cost is essential when outsourcing since every entrepreneur wants to save funds wherever possible. It is vital to understand that every service comes at a cost.

Companies might offer attractive packages to lure Startups or businesses with limited funding, but it should not compromise the quality output. For example, the cost of IT outsourcing services should be less than hiring a team and setting up a workspace. The cost should be evaluated based on the services that the company offers.

Hiring a company with bad reviews or a lack of industry-specific expertise at a lower cost will be of no use in the long run, as the company will not meet the expected goals in the future. This could also mean considerable losses to the entrepreneur.

2. Letting the Outsourced team decide the goals

One big mistake that company owners make when outsourcing a function is letting the outsourced team decide the targets. The outsourcing company has the expertise, but they should not be entitled to determine the achievements.

The entrepreneur should share the vision and ask the team to develop a roadmap and strategy to reach it. This is the right approach to managing a business properly.

3. Outsourcing isn’t magic; it’s a time-taking process

Sometimes, companies consider outsourcing when their in-house team cannot handle a project. They expect the outsourced team to deliver results in a jiffy as experts. But this isn’t true. Outsourcing is a process that involves knowledge exchange, and the team first needs to understand the requirements and then strategize accordingly.

One should never expect overnight results since they may not be sustainable in the long term and could do more damage than good. You can read this list of the best web development companies for your reference.

4. Location of the company

Globalization has led to advancements in technology, and outsourcing companies are now pitching to clients based in other countries too. But as a company owner, one should evaluate whether the outsourcing company can bridge the cultural and developmental differences.

A company offering marketing outsourcing services might boast of its excellence in marketing tricks. This has a significant impact on the end results. Thus, a company planning to target an audience in a particular region might fail if the outsourcing company cannot suggest the right move.

5. Neglecting communication

Communication is the key to success when outsourcing services. However, companies tend to neglect its importance as they believe that once hired, it is the sole responsibility of the outsourcing company to fulfill the goals. This helps eliminate the loopholes in the early stages and ensures success.

An in-house manager working closely with the outsourced team can keep track of developments and communicate the desired results at each stage. Feedback helps the teamwork in a better way and leads to less stress during the project. There have been instances where miscommunication led to disastrous results which could not be altered and led to losses. So, it is better not to commit such a mistake.

6. Relying on the Outsourcing team for every task

When companies opt for outsourcing services, over time, they tend to get casual and assign each task to the team. This leads to increased costs and disappointment in the future. It is necessary to not rely on the outsourced team for every small work.

Tasks that the in-house team can complete efficiently should be rendered to them as this ensures the best resource management and avoids additional costs. Companies that commit such mistakes keep adding the cost, and later on, outsourcing comes out to be an expensive alternative. Therefore, keeping everything transparent, understanding the costs associated with projects, and maintaining records.

7. Neglecting customer retention rate

Outsourcing companies showcase their records and work for pitching to new clients. Entrepreneurs usually make mistakes and evaluate based on what is presented to them. But this approach is not correct.

Business owners should check for customer retention rate since that is the actual definition of the success rate of the outsourced team. Clients who are happy with their work would come back for new projects.

Hence, neglecting this aspect would lead to a wrong decision. Before making a choice, it is necessary to have detailed discussions and interviews about future expectations and tasks that the team would need to take up.

8. Expecting the outsourced team to be prepared as soon as on-board

Indeed, outsourcing companies work with all kinds of companies from different sectors, but that does not guarantee that the team would always be prepared. Every entrepreneur has a different goal when outsourcing, and this goal should be conveyed to the team so that they work accordingly.

Such issues in software, app, and SEO outsourcing services can lead to disasters as the team won’t know which aspects to focus on, and the company owner would expect everything to fall in place. Thus, outsourcing to a team and then making them understand the desired goals is essential.

9. Ignoring security concerns

Outsourcing comes with an associated risk of data security. Business owners should not neglect this aspect since it can have dire consequences.

Data is crucial for every company, especially when dealing with software and accountancy outsourcing services. Thus, it is always recommended to deal with a company that guarantees complete data security at all times. Good companies mention such points in their contract and give priority as they understand industry concerns.

10. Not precisely evaluating projects

Evaluating end-product when outsourcing is vital. Managers sometimes tend to take the output for granted and do not get into in-depth evaluation. This is a serious mistake common in software and app development projects.

An app that appears to be working fine might have faults in coding or processing. Therefore, when companies opt for software outsourcing services, they need to be vigilant and check each point of the outcome thoroughly to avoid future concerns.

Key Takeaways

Outsourcing is an excellent approach to getting expert professionals to work on projects. If there are no mistakes, the results are of good quality with timely delivery. Big brands have taken up this trend as they need to manage several tasks simultaneously, which can be strenuous for the in-house workforce. Professionals can focus on more critical tasks and outsource work that needs to be completed within a timeframe.

Outsourcing for long-term projects should be made precisely as they involve a lot of interaction between the entrepreneur and the outsourced team. Strong customer support helps businesses grow steadily.

A good outsourcing company renders support in terms of up-gradation, modification, strategy development in phases. Choosing the right outsourcing partner a business can grow more.


Marting is a passionate business writer working in this field for over four years. His tips for branding helped many clients in their businesses. He enjoys preparing content that provides value to users.

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