As if managing complex technology projects wasn’t difficult enough, outsourcing can create numerous stresses you likely have not experienced when using a primarily or exclusively internal team. Interestingly, it’s not the technical competence of the outsourcer that normally derails projects. Instead, it’s a lack of communication and a common understanding of simply what’s important, and how to meld diverse organizations into a cohesive unit.
So how can project leaders keep outsourced, especially internationally outsourced, projects on track and on a budget? In this article, Uway will give you definitions of outsourcing, reasons why you need to outsource, and how to manage them effectively to receive the benefits of such a relationship.
Outsourcing is a form of using outside resources to perform work that employees in the company should be undertaking. That is a way of transferring jobs to a highly specialized and qualified service provider. In some cases, outsourcing also includes the transfer of employees in an enterprise to an outsourced service company. So what is the reason for businesses to use external resources in their marketing activities?
What is the reason why businesses choose to outsource?
It must be said at the present time, there are more and more companies, and agencies outsourcing personnel. Of course, they do it for their own reasons. But outsourcing will certainly bring benefits that any party should consider in case their personnel is overloaded or unstable. There are many reasons why businesses choose to outsource certain jobs. The most common reasons are:
- Reduce and better manage costs.
- Improve the company’s main expertise.
- Partnering with top companies.
- Unlock internal resources for many purposes.
- Improve the quality of time-consuming jobs.
- Make the most of outside resources.
- Share risks with partner companies.
Outsourcing can help businesses reduce labor costs significantly. When a company uses outsourcing, it helps outside organizations that are not affiliated with the company to complete certain tasks. Outside organizations often set up different compensation structures with their employees compared to outsourcing companies, allowing them to get jobs done with less money. This eventually allowed the company to choose to outsource to reduce labor costs.
In addition to cost savings, companies can use outsourcing strategies to better focus on core aspects of the business. Outsourced operations can improve efficiency and productivity because another entity performs these smaller tasks better than the company itself. This strategy can also lead to faster turnaround times, increased competitiveness in an industry, and cut overall operating costs. Businesses can also avoid costs associated with costs, equipment, and technology. Companies use outsourcing to cut labor costs and business costs, but also allow them to focus on core aspects of the business.
What are the downsides to consider when outsourcing?
As well as the benefits, outsourcing also has several accompanying disadvantages that make many business owners afraid. In this section, let’s take a look at some of the downsides to outsourcing that can affect your final decision:
– The potential security risks of outsourcing
– You have to sacrifice a bit of control
– Difficult to maintain quality control
– Language barriers may occur when outsourcing
6 tips for managing outsourced projects:
6.1 Be transparent
A good indicator of the company culture is the ability to say what you think to anyone (regardless of position). Especially about problems, weaknesses, and mistakes. As Ray Dalio suggests — be radically transparent. That way your team will be able to come up with amazing ideas and solutions. Note: it’s pretty difficult for people to face uncomfortable truths and become transparent.
6.2 Be proactive
If the client asks for an update about the project — you’ve already failed. Set up effective communication so that client never needs to ask for an update. Ask for feedback before the client tells you what to improve. Communicate every problem or potential issue as soon as possible.
6.3 Be involved
Engaging with an outsourcing partner may entail a different approach to management and may mean a shift in work processes. It is important for you to know the processes you are entrusting to the outsourcing services provider as well as knowing the profiles of the people you want to fill the post. Although it is not mandatory, some executives join the recruitment process to get to know the candidates. This can give you an idea of how the outsourcing company selects the staff who will be working with you. Taking part in the recruitment process can give you the opportunity to discuss further your requirements and expectations. Aside from recruitment, another way also is to arrange a kick-off meeting with the entire team.
6.4 Communication is the key
There are a lot of communication obstacles in-house, let alone in situations when working with remote talents and teams. This is why you have to devise a communication strategy with the outsourced team before you start working on a project. Things you want to address before starting a project are:
- Define a line of communication if the project stops due to a critical issue;
- Since there are different types of communication, decide which communication channel should be used for each communication type;
- Define the communication frequency, i.e. when and how often will they send you reports.
During the project, there will inevitably be some questions. With a clear and effective communication strategy, you will reduce redundancies and increase the productivity of remote workers and teams.
6.5 Manage the relationship, not just the formal aspects of the contract
It’s in both your interests to make your relationship work. A well-drafted contract provides a legal “safety net”, but well-thumbed copies can be a sure sign of problems. But good, mature relationships don’t come overnight – don’t expect trust from day one. As commercial professionals, we must learn to manage relationships effectively if service excellence and value for money are to be assured for our institutions.
6.6 Treat outsourced members of your team with respect
You cannot assume that your company will spontaneously enter into a smooth working relationship with an outsourced team. The old “throw-it-over-the-fence” approach where tasks were simply assigned to an outsourced service provider has in recent years, been replaced by a greater emphasis on creating a true partnership between client and service provider.
The first thing you need to do if this is a new situation for you is to be committed to outsourcing as a business strategy and to be comfortable with the processes involved. “Take some time to get to know the members of the team,” advises Tom Fountain, CTO of Pneuron, which provides distributed enterprise solutions. “. Whether through a video conference or other means, put faces to names and get to know what makes them tick. Bottom line: treat your outsourced team like the partner you expect them to be” and they will be.
These tips make managing outsourced projects a lot easier. We strongly believe that a good plan, an established communication strategy, and a reliable outsourcing partner, make any outsourced project achievable with almost no management at all.