Leadership Focus: 9 Perils of Outsourcing – Avoiding Expensive Mistakes

Many organisations and businesses continue to look for more cost effective resourcing methods, with outsourcing being one of the most popular utilised. However, do you know how many organisations mis-manage outsourcers with extremely expensive results.Here are my top #9 Perils of Outsourcing, and how to avoid expensive mistakes:

  1. Formulating staff specific skills requirements, to ensure you get the required experienced to meet the demands of your operation
  2. Have strong Service Level agreements, clearly showing daily/weekly/monthly/annual expectations with breaches clearly identified
  3. Ensuring your organisation has a get out clause, in the event of the outsourcer failing to deliver their part of the bargain
  4. Identify simple frameworks to ensure the outsourcer has clear guidelines to follow and what you expect from them
  5. Monetize and quantify the savings you expect to make, and ensure they are timebound
  6. Believing that transferring the same cultural inshore work practises to outsourcers will work again
  7. Spend time at the outsourcers site, immersing yourself in the target operation. Remembering that this time is well spent, considering the outsourcer is about to consume large parts of your operation. Arrange regular site visits thereafter to ensure the outsourced operation is running as expected, and if only to cement your relationship with them
  8. Ensure that you have an expert legal team to assess your outsourcing contract. Be aware that most outsourcers typically work in a loss-lead basis, which essentially means they are counting on your in decision and expect you to change your mind constantly.
  9. Above all, know what you specifically want from an outsourcing agreement. To do otherwise, will prove costly.