The Problems Associated with Outsourcing and How to Deal with Them

October 12, 2021by ISETech Insights

Outsourcing is more than just an IT trend; it is the way many companies in the industry operate. There are a lot of direct and indirect benefits of outsourcing which is why larger businesses and Fortune 500 companies choose to outsource development projects. Although the advantages exist, there are many challenges associated with it too. Companies have to face problems with outsourcing software development to offshore vendors. It is essential to be aware of the outsourcing ethical issues and the different ways to handle them or avoid them entirely during your outsourcing venture.

Limited Control Over How Things Are Done

Outsourcing the development processes to another company means relinquishing control over them. The vendor can do things however they see fit, and often, they will not include the client in the decision-making process. You might not have any information on the methodologies they are using and cannot make requests.

However, it is essential to realize that this is not precisely a problem if you do not let it become one. Giving up control can translate into a disaster when the client is not ready to accept it and wants things done a certain way. We recommend that you talk to both parties, i.e., the client and the outsourcing agency, before making any commitments and help them develop realistic expectations from the project.

The initial meetings are the best time to figure out the details and ask the vendor about their processes. You can also request them to do things a certain way and negotiate the terms—outsourcing problems and solutions when agencies are willing to make changes to please the client. As long as you have found a flexible team, the lesser control will not be a problem.

Not Taking Ownership of the Product

Employees tend to feel more pride in their work when they do it themselves. Your team member will be going the extra mile for a project that will directly affect their company and annual evaluations. Internal employees are more likely to be innovative in their processes and look out for mistakes than a developer working for an outsourcing firm. The lack of loyalty and ownership can result in issues with outsourcing jobs.

problem-solving

It is a common issue when working with outsourcing teams, and it is understood that someone working on a product they do not own will not feel any loyalty or pride towards it. To avoid running into any problems like these, a long-term partnership with an outsourcing firm is preferable. You can include them in corporate events, company parties and invite them to happy hour so they can interact with your employees as well.

If they are in another country, then weekly check-ins and chit-chat sessions over video conferences are a great way to include them in conversations. You can check how things are progressing and whether or not they are invested in the project. It takes time to build a relationship but caring about their well-being and taking an interest in their lives goes a long way.

Lack of Agility and Customization

If you consider outsourcing the development work to an outsourcing firm, you must be prepared to give up some benefits. An internal employee working on the same project will customize and respond to changes much quicker than an outsource. The outsourcing company has a lot of clients, and they have to provide services to everyone. They usually take a standardized approach to help them get the work done on time. There is typically no room for customization or changing the way they do things for you.

If there is a new client for your business and they are particular about their development requirements, your internal employees will be much better at handling them. They will be able to respond to their requests much quickly and in a better way. With outsourcing, you will have to call their manager and get them to change the process and quote a new price for it. It will take much longer and increase the response time considerably.

Although the same is not valid for every outsourcing firm, if you hire a smaller company, they will accommodate you in a bigger capacity. Teams need flexibility, and you have to communicate to promote an equal partnership for both firms. The agency will be willing to help as long as you maintain transparency during meetings. 

Possibility of Miscommunication

Communication is one of the biggest problems with outsourcing software development because of the distance between both teams. If you want something changed, it is not as easy as walking over to the department and asking for it. With outsourcing companies, you have to resort to email or calls to get your point across. 

In some cases, there is a long chain of command, and you need to get through to multiple people before your message is received. You can avoid it by requesting a direct point of contact and establishing a protocol for easy and quick communication. The ISETech dedicated development team is mindful of identifying communication protocols in the first meeting with the client.

The Burden of Secondary Costs

There are several outsourcing categories, and sometimes you might only need to outsource for a specific function. When you are outsourcing for an area in which you have no expertise, you should expect yourself to be spending a significant amount of money. 

In other situations, when you are trying to reduce insourcing costs by outsourcing, it might be cheaper to hire an outside tea

m for the job. However, there are secondary costs associated with it. If the quality of that process is compromised, you might end up losing business or hiring more internal employees to offset the difference.

Secondary costs are some of the most significant issues with outsourcing jobs, and you have to take everything into account when making the decision. There needs to be a short-term and long-term analysis of the project so you can avoid unforeseen costs. 

The Ethical Dilemma

Many companies are scared of outsourcing ethical issues when they have to consider it as a solution. Especially if the outsourcing agency in question is Indian or Chinese, these countries have a lot of human capital, and their qualified resources are available at lower costs. However, outsourcing to companies abroad leads to people at home losing their jobs.

On the other hand, companies that refuse to outsource are more likely to be less competitive, losing their business. A better alternative to shutting down the operation would be to outsource services to other countries. A few employees losing their jobs is better than the entire organization going bankrupt. 

Bottom Line

Outsourcing is a great development model for companies that lack the technical expertise, skills, and resources to complete a project. It needs to be managed in a way that the situation stands to serve both parties. There are ways you can improve communication lines and negotiate the terms, so there is a more significant deal of customization and flexibility on both ends. Working with an outsourcing agency can be a rewarding experience for both companies as long as they are open about their expectations and are aware of outsourcing problems and solutions. 

 

© ISETech 2021. Registered in England & Wales. Registered Address: 1 Westmoreland Terrace, London, SW1V 4AG.

Company #: 10853497. VAT No.: GB287346269
bt_bb_section_top_section_coverage_image
bt_bb_section_bottom_section_coverage_image