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Biggest Outsourcing Mistakes to Avoid

Everybody likes to learn about potential mistakes before making them. BNET and author Jeff Haden took a look at seven of the biggest outsourcing mistak...

Freddie Pierce
|May 17|magazine6 min read

Everybody likes to learn about potential mistakes before making them.

BNET and author Jeff Haden took a look at seven of the biggest outsourcing mistakes to avoid yesterday. In honor of that, we’ll paraphrase his seven and provide a few of our own.

1.) Outsourcing functions that directly touch the customer

Put it this way- would you rather call an actual person or sit through Dell’s automated customer support? Don’t take away something that adds to a customer’s experience.

2.) Overestimating cost savings

If anything, underestimate them. BNET says that receiving anything better than 70 percent of your estimated savings is a win.

3.) Failing to provide guidance

Anything that goes without saying must be said, according to Haden, so make sure you’ve clearly defined your mission and guidelines.

4.) Jumping in too quickly

You read all the time about how companies outsource entire departments. Resist the temptation, and outsource as needed slowly.

5.) Failing to put measurements in place

Make sure you know how you’ll measure the effects of outsourcing outside of just looking at the savings. How will outsourcing the customer service department affect your company’s core business values?

6.) Going all in

Have measures in place should your outsourcing partner go out of business.

7.) Ignoring an exit strategy

As BNET put it, “every agreement should include criteria for disengagement.” Make sure you can get out of an outsourcing agreement quickly if your business is not getting what you intended.

And, a few of our own:

8.) Don't avoid research

Nobody likes to get online and sit for hours on end researching the pros and cons of outsourcing IT in the air freight industry. Suck it up, and do the work though. You’ll end up saving more money if you know what exactly you’re preparing for.

9.) Don't contact a single agency

You wouldn’t accept the first offer you received for any part of your business, would you? Go out and meet with several companies, understand what they do and pick the one that fits your company best.

10.) Don’t go cheap

Unless an outsourcing company fits exactly what you’re looking for, going for the cheapest outsourcing provider may hurt your business more than it can help in savings. Find the best fits, and then look at price.