Common offshoring mistakes you should avoid

offshoring mistakes

Offshoring is not an uncommon practice in the business world. With the many benefits it has to offer businesses, companies have relied on offshoring for years to gain a competitive advantage in the marketplace. The promise of providing efficient services at a cost-effective price acts as a beacon to many companies. Small and medium-sized businesses in particular are known to benefit immensely from offshoring. But like any other business practice a company chooses, offshoring requires careful consideration and strategy. Amidst the many success stories you will find about offshoring, you will also come across certain companies that have failed to reap any benefits from it.

Although each company is unique and requires its own strategy regarding offshoring, there are some ways that can help a company succeed in offshoring services. By learning from the successes and failures of other companies, there are some mistakes you should avoid when considering offshoring. Below, we list some common offshoring mistakes to avoid.

Putting money over quality

Since the primary goal of any company considering offshoring services is to reduce costs, it’s understandable why you might think that choosing an offshore service provider with a low quote is beneficial. But this is one of the biggest mistakes a company can make. Offshore service providers are an important factor in the success of your offshoring venture. They are the ones who will manage the services you outsource to remote workers; they are your eyes and ears on the ground. They are the other half in this business partnership, and you need to make sure you can count on them to have your back. A vendor’s ability to offer services at a low price is likely a reflection of its poor service quality. When you choose them as a partner, you are essentially choosing money over quality. It may be gratifying at that moment to save money right at the beginning, but it can really hurt you in the long run. Therefore, it is important that you carefully review your offshore service providers, scrutinize them and choose the one that provides you with quality services and shares your vision.

No analysis of your business requirements

Offshoring offers you the advantage of hiring labor at a much lower cost than hiring locally. Therefore, it may be tempting to move a significant portion of your company’s services offshore. You may see a competing company offshoring such and such functions, and now wonder if you should do the same. But that’s not how offshoring works. Offshoring is very specific to your business and your company’s needs. It requires a careful analysis of your business. Before you even start looking for vendors, you should have a clear picture of your needs. You need to know the processes that you can move from your company to a distant country. Once you have an idea of which processes are your core business, you will be much closer to selecting the processes that can benefit from offshoring.

Lack of communication

Communication is the name of the game in business. Your employees should be able to communicate and collaborate with each other in order for any project to be successful. However, communication becomes even more important when two teams work far apart for the same company. Distance can be a challenge, especially when time differences are involved. But to achieve the level of quality you expect from your offshore team, they need all the information that is central to the project. Emails are not always the answer. You need to set up multiple communication channels that include audio calls, video calls and instant messages. Keep your offshore team informed of new information and current updates through an appropriate communication channel, and make sure you are available when they need to contact you. Effective communication is how you keep your offshore team engaged and on track.

Too little or too much engagement

If you have a team of employees working for your company from far away, there are two likely outcomes. Since they’re not where you are, you either forget you have an offshoring team and barely interact with them. Or, since they are not where you are, you are constantly in contact with them, requesting updates and monitoring their work. Neither option leads to positive results. Micromanagement and no management are both detrimental to your business. Your offshore team is an extension of your onshore team. They exist to complement the people in your office, so they need to know everything that is happening in the office related to their work. If you keep them in the dark, it negatively impacts the work they do for your company and your business suffers. Likewise, if you’re constantly checking up on your employees and overlooking their every move, it can lead to a lack of trust in them, which is never helpful. It’s also counterproductive, since offshoring is supposed to save time and energy. The key is to find a balance between the two. Make sure your team is provided with the information they need. Ask for regular updates, but without being overbearing. Your outsourced processes should not suffer from inadequate management.

Lack of a backup plan

Always be prepared for the unexpected. Even if you do everything you’re supposed to do, sometimes things don’t work out the way you want them to. So always have a strategy ready in case your offshoring plan doesn’t work out. Maybe it’s because the vendor is unable to deliver, or maybe it’s because of external factors like a natural disaster hitting your offshore location. Whatever the reason, it’s always wise to plan ahead for any crisis you might encounter in the future. This way, you can minimize your losses and come out of it with a plan.

Offshoring is the answer that many have been looking for to cut costs without giving up control of their business operations. So if you think it’s right for your business, go ahead. If you avoid these few common mistakes, you’ll be a lot closer to successfully offshoring business processes.