Businesses are frequently told that in order to surpass their competitors, they should look to outsourcing as a way to reduce costs, improve performance, and take advantage of other people’s knowledge and experience. However, there are problems with outsourcing that are rarely discussed.
Browse the website of any business that offers outsourcing services, and you will find plenty of lofty claims and ambitious promises about the quality of the service they will provide. If you find yourself reading these and thinking that they sound too good to be true, you aren’t alone.
Regardless of what vendors tell you about the quality of their service, you can’t believe anything until you have verified it for yourself. Unfortunately, doing so is often easier said than done. Unless they are willing to give you a free trial of their services, you don’t know if the promises are true or not. Even if you do get a free trial, it will only tell you how the vendor performs in the short term.
A broken promise from a vendor might involve something minor. But in many cases, these broken promises can significantly reduce the value of the service you are paying for. For example, if you are outsourcing the software development side for your business, you expect a competent coder to do the work. The source code that the vendor hands you at the end should be robust and written according to industry standards.
It doesn’t matter what services you are outsourcing; you always expect to get the service that you pay for. Unfortunately, far too many vendors over-promise and under-deliver. They get away with it because so many businesses never bother to audit the service they are receiving to ensure it is up to standard.
A Lack of Experience
Vendors love to emphasize that outsourcing enables businesses to take advantage of knowledgeable and experienced staff that someone else has paid to train. Because of this, companies often imagine the vendors they hire having buildings filled with the best and brightest in their field.
Unfortunately, the reality is often very different. Terms like ‘experienced’ are often much more subjective than people realize. Take cybersecurity as an example. Investing in cybersecurity is often time-consuming and expensive. Companies that outsource their cybersecurity expect the agents to really know what they are doing.
However, you have no way of knowing whether the people who are handling security for your business have been working in cybersecurity for two weeks or two decades. They might have plenty of qualifications and degrees, but no practical experience. It is only by hiring your own internal staff that you can be absolutely sure about their qualifications.
Another key selling point of outsourcing is the supposed money savings. The argument is that outsourcing reduces costs for businesses in several ways. For example, vendors who provide remote workers and services pay for the costs of training workers and providing them with tools and equipment. In theory, outsourcing should save a business money, but this isn’t always the case.
Even with an iron-clad contract in place, there can be unexpected costs associated with outsourcing services. The value of outsourcing depends on the quality of the remote services or workers that the vendor provides. Often, vendors aren’t even meeting their own supposed standards. This variability makes it difficult to assess the value of your relationship with vendors properly.
Lack of Control
Control is a very valuable thing to have in business. Having control means that businesses can make the decisions they need to make when they need to make them. Initially, outsourcing might seem like it should simplify things for businesses. However, outsourcing actually reduces control. It is the vendor, not the client, that has ultimate control over their workers and infrastructure.
If you want to maintain complete control of your workforce, you need to employ them yourself. You can direct workers who are under your employ and part of your corporate structure as you see fit. So, if any issues arise, you can be considerably more agile in reacting to them.
Good communication is essential for any successful business. Using an external vendor means you are dependent upon them maintaining communications with you. If they don’t do this, it is your business that will suffer.
Vendors often tout outsourcing as a panacea for any woes a business has. But outsourcing is not all it is cracked up to be. For many businesses, it makes life harder, not easier.