Outsourcing Mistakes to Avoid

You can go overboard with outsourcing and get your business in a heap of trouble. If you're dabbling in outsourcing, here are some common small business outsourcing mistakes you'll want to avoid.

There are a lot of things that can go right in your relationship with an outsourced service provider.

Outsourcing Mistakes to Avoid

However, there are a lot of things that can go wrong, too. Most outsourcing disasters can be avoided with a little upfront planning -- and a working knowledge of the outsourcing mistakes that are commonly made by small business owners.

  • Wrong motivation. There are a lot of good reasons to consider outsourcing. But if your primary motivation is to save a few bucks on labor, you could be in for a rough ride. The simple truth is that the decision to outsource involves many other factors in addition to labor costs.
  • Wrong provider. Along the same lines, you can't evaluate outsourcing providers on price alone. Cost counts -- but so do reliability, quality and expertise. In fact, the lowest priced provider usually isn't the one who is capable of delivering the right balance of cost and job quality.
  • Vague outcomes. When you enter into a relationship with an outsourcing provider, you need to be crystal clear about the outcomes you expect to receive for your investment. A failure to adequately articulate those outcomes in the contract and in your conversations with the provider will make it difficult to evaluate the project's success.
  • Outsourcing core business functions. Outsourcing works best when it offloads peripheral activities that distract you or your staff from your core business functions. If you approach outsourcing as a tool to perform functions that are vital to your mission, you will do a tremendous disservice to your company and to the people you rely on to achieve your strategic goals.
  • Lack of oversight. Unfortunately, small businesses sometimes outsource work and then fail to properly oversee its progress. Although you can't expect to exert a high amount of influence or control over an outsourced provider's work process, it's necessary for someone in your business to keep tabs on the provider's progress.
  • Single-source outsourcing. If you plan on outsourcing a significant chunk of your company's peripheral activities, you should consider spreading it out over several providers. Single-source outsourcing leaves your company vulnerable in the event that the provider goes out of business or fails to deliver quality outcomes.

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