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