The Three Most Common Outsourcing Mistakes By Shaun Parker At Isnare.com Ezine Articles

Lost in much of the public debate about offshore outsourcing is the actual process of transferring business operations to a third-party company outside the U.S. It's time consuming, complex and fraught with peril.Still offshoring has reduced costs by as much as 50% while enhancing quality & satisfaction of customers. Fortunately, most companies make the same mistakes.

Big American companies have been outsourcing ever-more critical aspects of their business to offshore companies in an effort to cut costs and improve efficiency. Offshore companies can also provide better quality than the U.S.

1. Most companies woefully under invest in the ongoing governance and management of the service provider relationship and underestimate the time, money and people it takes to manage far-flung operations effectively. The savings won't be as great, but companies must invest in overseeing the partnership for the long term. This includes establishing a dedicated team of people, on both ends, to ensure compliance and adherence to agreed-upon service levels.

2. Before deciding on a country or service provider, first determine the cost of running your business processes and what your objectives are. If your service levels and costs are already competitive, it won't make sense to farm it out. Study the expertise of each potential partner, considering proximity, costs, cultural and language barriers, telecom infrastructure and tax laws among other factors, before making a decision. India will not always be the right answer.

3. Before deciding on a country or service provider, first determine the cost of running your business processes and what your objectives are. If your service levels and costs are already competitive, it won't make sense to farm it out. Study the expertise of each potential partner, considering proximity, costs, cultural and language barriers, telecom infrastructure and tax laws among other factors, before making a decision. India will not always be the right answer.

But make no mistake. Planning, execution and continued oversight of an outsourcing strategy requires a lot of work. The benefits will not be realized immediately and cost savings will probably not be as significant as predicted.

Experts in the growing field of outsourcing advisory services say companies tend to fall into the same traps when planning, executing and maintaining an outsourcing strategy.

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