Outsourcing Risks (And How To Avoid Them)

There are times when outsourcing makes perfect sense.

If you or your team lack a particular skillset or if there isn’t time to put quality work into every task associated with your business, it is worth considering the services of an outside company.

In this way, you can grow your business through outsourcing, as the professional services of an outside team could help you make improvements where they are needed.

However, outsourcing does come with a number of risks, and to prevent harm to your business, these must be avoided. 

Here are some examples of outsourcing risks. 

#1: Poor quality service

There are many companies online, each one advertising their services to businesses like yours. However, they aren’t all created equal. Some will be better than others, so it pays to shop around. If you don’t commit to research beforehand, you might end up with a company that delivers a shoddy service. Deadlines might be missed, the quality of their work could be poor, and they might even take your money without completing your project. 

To avoid this, there are a number of things you can do. 

Check the company’s website for reviews and testimonials to find out what other customers are saying about them. Consider these My Business Venture reviews for examples of what you should be looking for.

You should contact the company and ask for references too. 

And you should commit to a Google search for media mentions, special media comments, and customer opinions on business review sites.  

After researching companies in such ways, you should have a better idea of who you should and shouldn’t outsource to. 

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#2: Hidden costs

You know there will be expenses to cover when hiring somebody, so you should factor in the costs of outsourcing within your budget. However, you don’t want to discover any hidden costs down the line, as this could put you in a difficult financial position.

To avoid this risk, don’t assume the prices advertised on the company’s website are what you will end up paying. Carefully check each tariff plan, read the small print under each, and clarify costs with the company you are considering. 

Be direct and ask the company to reveal any other fees that they might charge you. 

And before you sign the Service Level Agreement, check that every expected fee is written on there, with no hidden surprises. 

#3: Lack of communication

A lack of communication can be a serious problem. If you needed to request changes or ask for updates, you would understandably start to panic if the outsourced company didn’t respond to you. Delays can be expected with an overseas company due to time zones, but if you’re working with a company within your country, ease of communication should be less of an issue. 

To avoid this risk, arrange a schedule that works for everybody. This will let you know when the company will be working on your project and when you will be able to contact them. 

You should agree on a time each day or week for phone calls or video chats if you need to be in regular contact. 

The stipulations for communication should also be written into the contract, as this will encourage them to stay in touch with you. 

Finally

Outsourcing can be beneficial but there can be problems too. You can avoid some of these by following our suggestions. Consider what we have said and then do what you can to minimize any other risks that could be associated with outsourcing.