Outsourcing
Articles >> Outsourcing Problem
All business decisions and operations involve risks, which is a part of
doing business. Outsourcing is not an exception and that is something
that of course a company needs to be prepare for when making outsourcing
decisions. There will be risks at every stage of the any process. It is
obvious that a company needs to consider the risks involved in
outsourcing its processes. Once the risks have been identified they
should be analyzed and processes should be created to minimize those
risks.
Some main outsourcing problems or risks can be
identified in outsourcing operations.
1. Geographical
problems:
Outsourcing can result in many problems that are
related to the geographical location of an offshore destination. Some of
these problems may include language problems, accent problems, political
instability, change in laws and regulations, labor laws, cultural issues
and so on.
2. Infrastructure and operational problems:
Infrastructural and operational problems can be in the form of for
example insufficient communication infrastructure, undeveloped disaster
recovery capacity of the country, power generation capacity, and non
renewable resources availability. Thus before choosing an offshore
location, it is vital for a company to make sure that all the statistics
and factors support outsourcing to that destination.
3.
Project related problems:
The main outsourcing problems
nowadays would most probably be project related concerns. As more and
more companies are outsourcing the geographical, infrastructural and
operational risks can be evaluated in advance regarding that the
destination is already known for its outsourcing market. For example
with India and China the before mentioned risks and problems are known
and have already been experienced by many companies and do not come as
such a surprise. Project related problems on the other hand depend
wholly on the provider, the project to be undertaken, the process of the
project and the relationship with the provider. These aspects include
several risk related issues such as expertise and manpower of provider,
reliability and ability to execute the required tasks as agreed and for
example whether the provider can fulfill the outsourcing company’s
expectations.
In order to avoid the basic outsourcing
problems a company should take preventive actions before hand,
maintain close contact and control of the outsourced operation and its
provider as well as keep up-to-date with all issues concerning the
outsourced operation.
