Indian Talent, Global Content
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Indian Talent, Global Content |
September 2008: What's in the breeze |
The Top Ten Mistakes Made By First Time Customers
Outsourcing is “in” and how! In fact if companies are not studying the global trends in outsourcing and considering where and how to outsource, they may send a message to their investors that the bottom line does not really matter to them. Interestingly even public sector corporations within India are outsourcing today. If you are considering outsourcing or off shoring, here are a few tips on what not to do! We have listed out top ten mistakes a first time customer might make. They are listed in this specific order as determined by the impact the decision would have had on cost savings, which was really the first reason you set out to outsource! 1. Not having a clear idea of what to outsource: It is seen that projects requiring teams to work closely together may not be suited for outsourcing. It is better to look for self-contained tasks or projects. Unless of course, you are a big corporation and the vendor can place consultants on-site to work on this project. 2. Not doing enough work ‘shopping’ for the best provider: It is imperative that you do enough back-end work, researching and finding the right service provider. A certain level of trust needs to be built up before you tie up with a vendor. This might happen over emails and/or phone calls. Good indicators are the speed of response, the quality of communication and samples of work. It is highly recommended that you start with a pilot project, with clear deliverables and deadline, well within a budget, which will be indicative of things to come when you scale up. 3. Not accounting for hidden costs: Take into considerations expenses that may arise based on your decision to outsource – for example the layoff-related expenses, any overtime costs for the remaining staff who may need to work longer hours and check on the additional telecommunication charges that you may have to incur. 4. Not keeping their company executives informed about the move: This is one of the most common mistakes made by the first time outsourcing customers – failing to get their team on board. 5. Making proprietary information available without signing a NDA: Sharing information is inevitable while outsourcing, but the mistake to watch out for is in not ensuring that a NDA is signed between the two parties. Ensure that your copyrights will be protected and that you own the end product, if any. 6. Outsourcing your core area of business: Outsource to expand your business and not face the risk of giving away your trade secrets. 7. Not making the best use of the knowledge a vendor might have: Not using the vendor to bounce ideas off and to understand the services better is like losing out on an opportunity being provided to you on a platter. Though the vendors do have an agenda of getting your business, you will find that there are many who can provide you with valuable insights – what to cover in the project brief, which assignment to start with, how to structure the project etc. It is not wrong to ask all the questions you want to and get the best you can out of each interaction. 8. Not understanding the work culture of the country where the vendor is operating from: This highly connected world, not only facilitates outsourcing, but also brings with it some imponderables. It will be a good idea to try and understand the culture, the ways of communications and the infrastructure facilities of the vendor country in general, and their company in particular. Plenty of information on all this is available on the net. 9. Not having a back up plan: Okay, you decide to outsource the editing work for all the articles that will go into the next edition of the magazine you publish, as your best friend recommended. What you did not factor in, is that, the city where the vendor operates from faces serious flooding and their facility is washed out – all within a few days! The scenario might seem extreme, but just as big companies like IBM always have a back up plan for all the third party projects they handle, it will be a good idea to draw up a back up plan before staking your all at one go! Especially, not the first time you step out into the world of outsourcing. 10. Once satisfied, not sticking to the same provider till you get the maximum value out of the relationship: Though this might seem a minor issue, it can play a major role in how efficient your outsourcing effort turns out to be. If you have a good experience with the first vendor you work with, then you should stick with them till you get the maximum out of them. There are plenty of choices out there and finding the right partner may not be difficult, but reaching an understanding, setting up the necessary systems etc. would have taken a lot of one-time investment – both by way of time and money. Not capitalizing on this would be a mistake.
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