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Outsourcing work to places like the Philippines and India has become a natural fact of life across all industries. As business process outsourcing grows more and more popular, there are certain mistakes that can be detrimental to an offshoring relationship. After all, it's not always easy to build and maintain business relationships across international borders. Here are some of the most common mistakes that are made when it comes to offshoring and some practical tips to avoid making them:
Allowing the Cost of Services to Determine the Outsourcing Location. Business process outsourcing is typically done to save money and increase efficiency. However, if you only look at the price in terms of dollars instead of the big picture, it's possible you will find yourself unsatisfied with your outsourcing partner. Instead of relying solely upon the cost of services to choose your business process outsourcing partner, look at external factors and ask the following questions:
- Are there any additional services or perks associated with a particular outsourcing partner?
- Are onsite visits necessary and/or feasible?
- Does the offshoring partner have experience working with companies similar in size and scope as yours?
These factors considered in conjunction with the overall cost will make for a more promising and likely more successful business process outsourcing relationship.
Failure to Build Relationships with the Outsourcing Partner. Relationship building is a critical part of business process outsourcing. When working with business partners in another country, it is important to take time to understand each other before jumping right into the work. Recognizing cultural differences between the two countries involved is also important. For example, a company from the United States might partner with a company in the Philippines for business process outsourcing. There will certainly be differences in best business practices between both countries. Research is necessary, as well as clear communication understood by both parties. Some of the following tips can help build relationships with an outsourcing partner:
- Meet and greet one another face-to-face.
- Identify key contacts in each business and introduce them.
- Stay in touch via email and telephone. It's even appropriate to place a call or send a note when there are no problems or questions.
Failure to be Flexible. As with any business relationship, flexibility is the key in business process outsourcing. The idea that "a deal is a deal" is completely unrealistic in the offshoring environment. Every outsourcing relationship is unique, and it might be necessary to revise and revisit strategies on a regular basis.
Avoiding these three major offshoring mistakes can help your company maximize the results of business process outsourcing. From China to the Philippines, or even India, you can build strong, lucrative outsourcing relationships.
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July 31, 2009 5:42 am
Thanks for sharing this info post.
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Grad School Zone
UVA (Darden) MBA Admissions Deadlines for 2010-2011
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The University of Virginia's Darden School of Business recently published its application deadlines for the coming admissions season. Here they are, followed by our comments in italics:
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