#Supply Chain#Supply Chain Problems#Supply Chain Risks#Out#Supply Chain

Poor service quality named outsourcing's top risk

In times of shrinking budgets, outsourcing is becoming an increasingly attractive option for companies looking to save money. Outsourcing also helps co...

Freddie Pierce
|Jun 15|magazine6 min read

In times of shrinking budgets, outsourcing is becoming an increasingly attractive option for companies looking to save money. Outsourcing also helps companies focus on their core business.

But there can be a laundry list full of drawbacks. Not surprisingly, outsourcing professionals voted poor quality of service as the No. 1 outsourcing risk, as results from the 2011 IDG Enterprise Outsourcing and Service Providers Survey indicated.

Outsourcing professionals viewed poor quality of service as a bigger risk when outsourcing than security, loss of internal knowledge and hidden costs.

“When we weren’t clear enough with our requirements, it was a never-ending money pit,” Hargrove CIO Barr Snyderwine told ComputerWorld.com of one offshore outsourcing relationship.

SEE OTHER TOP OUTSOURCING STORIES IN THE SUPPLY CHAIN DIGITAL CONTENT NETWORK

The Top 5 Tax Efficient Outsourcing Locations

HP, Cisco and Motorola reinforce Egyptian outsourcing

Can India survive a disaster?

Check out June’s issue of Supply Chain Digital!

While some of the blame for outsourcing inefficiencies and problems stem from language and cultural barriers that will always be present when offshore outsourcing, the survey also revealed how companies can do a better job of handling their outsourcing expenditures.

Roughly 25 percent of respondents in the outsourcing survey rated their service-delivery management and measurement as very effective, while 43 percent said they were somewhat effective and 12 percent said they weren’t effective at all.

“The mentality all too often is, I have a contract in place, we’ve told them what we want, now they can do it all for us,” Synderwine said.

So, what can your company do to avoid poor quality of service when outsourcing? As we are detailing in July’s issue of Supply Chain Digital, overcoming language barriers while outsourcing can be the first step to avoid poor quality service.

Keeping in touch with your outsourcing provider on a weekly (or even daily) basis enables you to make sure that what you want done is being done how you want it. Setting clear and achievable goals can also help you avoid poor quality outsourcing services.