Pitfalls & Problems

Outsourcing arrangements are often time-consuming and substantial amount of effort is needed ensure that expected outcomes are realized. It should not be perceived as an opportunity to push the responsibility of doing your work to some one else. Some issues that organizations face when outsourcing include the following:

· Deterioration in service quality. Most companies that outsource face a widespread concern about drops in service quality. With regards to offshoring, some begs the question whether services delivered from half-way across the globe by a set of people who are culturally different from the parent company meet quality expectations. Some organizations get buffed by "sweet talkers" and end up finding themselves facing employees that are not as well-trained and experienced as they were claimed to be.

· Cultural differences. The cultural differences between the two countries where the vendor and client companies operate in are often a cause for worry in an outsourcing venture. Concerns such as governmental issues, bribes and language barriers often arise for companies who engage in offshore outsourcing.

· Geographical distance. While an onsite employee can always inquire his manager or an analyst within the office, a small problem that arises in offshore outsourcing may cause a huge ruckus with a pandemonic result.

· Communication barriers. Communicating with people over long distances can be perilous and difficult, especially if English is not taught passively in the country. Asking every employee of the vendor’s organization to be fluent in English can be over demanding, but it is crucial that project managers and leaders have adequate communication and language skills. If the client organization does not establish good communication channels with the vendor, certain things may be misrepresented and things can go awry.

· Failure to meet cost reduction expectations. Many companies enter outsourcing without calculating the real costs of the enterprise, expecting it to provide a quick fix for their financial difficulties. Despite being an excellent alternative to trim the organization’s budget, that fact, in initial stages, savings will neither be instantaneous nor exaggeratingly dramatic. If one turned to outsource for the single reason to rescue a failing operation, he or she would likely be utterly disappointed.

· Poor Planning. Adhering to the word "poor", planning can lead to a disastrous array of problems that may have been avoided with a little forethought. The process of risk analysis can prove to be vital to avoiding mistakes such as outsourcing too early, selecting a less-than-optimal vendor and following an inefficient business model. Potential secondary shortcomings should also be thought through and laid out. A software developer from the United States once when to India in anticipation of the cheap labour available through outsourcing but instead found himself charged with huge tariffs by customs officials when his company tried to ship the necessary development software and manuals.

Sunday, January 18, 2009