In the face of the global recession, outsourcing has emerged as a viable solution to help companies continue to innovate while allowing existing, yet limited resources to focus on activities that advance business goals. In order to gain the most out of those engagements, companies should avoid common missteps that may be taken during the onset of an outsourcing relationship. Easy to avoid, yet costly to fix, these mistakes do result in added time to market and unwanted spending. Common mistakes include:
1. Mismatching outsourcer goals and provider capabilities. The most successful outsourcing engagements match the business and technical goals of the client with the culture and strength of the provider. A clear understanding of outsourcing objectives and their close match to the attributes of an outsourcing provider is a must for a successful outsourcing endeavor.
2. Having an IT organization not designed for high-performance outsourcing.
It is imperative for the client’s IT organization design to support the management of outsourcing engagements. Successful outsourcing relationships are collegial endeavors that depend on shared vision, excellent communication, and transparent, compatible processes between the outsourcing client and provider.
3. Outsourcing your weaknesses. Outside viewpoints and expertise are beneficial for developing strategies and plans for overcoming weakness. However, managerial weakness is never a good starting point for outsourcing, as client organizations are still responsible for managing successful results in an outsourcing effort. Therefore, clients should only outsource functions where key management metrics, processes and success performance measures are well understood.
4. Underestimating the importance of effective communication. Without clear roles, responsibilities and collaboration in place, the client and outsourcer teams may adopt divergent strategies that can dilute or dissipate the value of the outsourcing engagement. Instead, clients should insist upon, and outsourcers should participate in, regularly scheduled “transparency” check-ins. This ensures that each party is following the intended workflow and helps to avoid unnecessary confusion, delays, rework and missed opportunities for early success.
5. Not setting clear, measurable objectives. From the onset of the outsourcing relationship, the scope of work and deadlines should be clearly outlined, defined, and agreed on by all parties involved. Without these elements in place, key project components can be delayed and the overall goal of the engagement overshadowed by missed deliverables, added expenses and more.
6. Not addressing business risks or devising a plan B. Companies today are at a significant disadvantage if caught off-guard by business risks that actualize into real problems. While outsourcers are well-versed in effective risk management, the most successful engagements happen when contingency plans are readily available and actionable should risks become real during the engagement process.