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6 Common Misconceptions About Outsourcing

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By Edited Nov 13, 2013 0 0

 

 

 

Here, I would like to take a look at the 6 major bloopers that create unnecessary stumbling blocks on the road to outsourcing.

1. Outsourcing is the reason behind job losses across Europe and the US:- Obviously, the number one misconception is that outsourcing has been responsible for the rising unemployment rate, particularly in the US. Go through any forum on outsourcing, scroll down the thread of any ongoing discussion, and you will find most western participants making no bones about their obvious dislike and disgust with outsourcing, and offshore outsourcing to India in particular. Jobs lost because entire departments were shipped overseas is not uncommon, but what few realize is that outsourcing has contributed only 1% to the unemployment situation in the US. Other factors like a weak economy or job loss that was inevitable anyway due to a preference for automation are rarely taken into account. Outsourcing just becomes everyone's favorite whipping boy.

2. Outsourcing cannot be efficient due to lack of direct supervision:- One of the biggest fears that plagues first-time outsourcers is that the entire process may smack of inefficiency since they would not be able to directly supervise what was going on. The crucial aspect of quality of work output is the biggest worry. The good news is that this anxiety may hold true in the case of freelancing, it certainly doesn't hold water when it comes to the dedicated employee model of outsourcing or even the project outsourcing companies that handle massive volumes of work for US MNCs. If instructions are clearly given and targets explained, there's no reason why outsourcing cannot be efficient.

3. Communication can be a big issue:- Thanks to the strides being made in technology, distance and time zone differences are no longer pitfalls to successful outsourcing. Skype, webcam, instant messenger, video conferencing all make quick work of the perceived gaps of physical distance and time. The top outsourcing companies have made sure that their clients, no matter which part of the globe they hail from, are wired to their remote employees and communication is as easy as talking face-to-face with a local employee. Of course, the freelancing model does throw up challenges in effective communication but clients usually outsource only that kind of work to freelancers where their close involvement is not called for.

4. Poor quality of outsourced work:- There are good and bad service providers in every industry but are a few below-standard companies justified in having that entire industry tainted as 'bad' or 'undesirable'? Similarly, to classify all the output produced as result of outsourcing as 'poor quality' is grossly unfair. True, sometimes unscrupulous or rogue vendors do pass on their projects or sub-contract them to a third party provider. The resultant distortion of facts in the knowledge transfer could well negatively impact the final output. But, then precautions must be taken before outsourcing and making the cheapest rate the criteria can (and often does) backfire.

5. Loss of control over customer base or lack of visibility of supply chain:-  A very real fear (actually a misconception) about outsourcing is the perceived loss of control over one's customer base or lack of visibility of the supply chain. There are many who still equate outsourcing with an alienation from their client base which is at the core of the business. But if there is clear understanding between a client and their outsourcing partner regarding goals, expectations, process details and responsibilities, there is no reason why this particular myth shouldn't bite the dust.

6. The cheap rates of offshore destinations is affecting the competitiveness of local talent:- Again, not true. What the critics of outsourcing fail to grasp is that for the scores of small business owners scattered across the USA, outsourcing often is the only way out. It is not a question of them shipping jobs overseas. They simply don't have the resources or means to employ local talent in the first place. Or the local talent may not be available at all. In that case, there is no 'job loss' at all, but merely the filling of a long-standing vacuum.

In the end, it can be said that anyone who embarks upon outsourcing should leave all myths and misconceptions behind. If a company makes unwise choices when it comes to the selection of the vendor and the reasons behind outsourcing, then those choices lead them down a road that would obviously. If your present systems are in a mess, then outsourcing them is not really the solution. Its just giving outsourcing a bad press for the choices that you made.

 

 

 

Offshore Outsourcing

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