Problems that Can be Solved by Outsourcing

What are the Problems that Can be Solved by Outsourcing?

Nowadays, being efficient is essential for corporate success, which is why outsourcing is frequently used. How one applies modern process management approaches is one of the critical determinants of how to boost a business.

Business process outsourcing (BPO) is now the trend for managing a successful company.

Outsourcing encourages firms and corporations to allocate resources where they will be most beneficial, Maintaining the characteristics of free-market economies globally.

However, you will always encounter risks in every plan. So it is best that you design future-proof strategies for your business. After all, your business’s security, compliance, and productivity depend on having reliable systems in addition to your operations.

If you want to know the advantages of outsourcing and the problems that can be solved, keep reading.

WHAT IS OUTSOURCING?

Outsourcing is a business strategy that involves recruiting an individual or staff to carry out duties, provide services, or manage operations that corporate workers would otherwise handle to cut costs and improve efficiency. In other words, outsourcing is having some work duties performed by a third party rather than within an organization.

Typically, businesses outsource to fill supplemental business procedures. It usually covers tasks not regarded as part of the core business functions, such as administrative, accounting, payroll, data recording, customer support over the phone, etc.

PROBLEMS SOLVED BY OUTSOURCING: CHALLENGES & HOW TO AVOID THEM

Numerous factors influence why more and more businesses outsource some of their work. With outsourcing’s advantages, such as cost-effectiveness, global access to great talents, and efficiency, it has undoubtedly become a contemporary approach to companies.

However, outsourcing is not all perfect and seamless. Are you interested in the challenges of outsourcing and your plan to address them? For you to fully profit from outsourcing, we will go through all the risks and their corresponding remedies.

Source: Magellan Solutions

LACK OF OUTSOURCING EXPERTISE & EXPERIENCE 

Smaller businesses that are relatively new to outsourcing may find the process intimidating compared to a corporation with outsourcing experience. You can know the workflow, prices, and best practices while communicating your ideas to another organization. If addressed correctly, one of the frequent problems outsourcing solves is a lack of experience.

SOLUTION

A professional vendor will guide you through the procedure, assist you in avoiding bottlenecks, and help you minimize any dangers. They will aid in the requirement definition, the discovery process, and the selection of the most qualified candidates. However, it is crucial to remember that outsourcing involves some risk. If this is a risk you are ready to accept, the correct provider will assist you at every stage.

POOR TEAM MANAGEMENT & LACK OF COMMUNICATION

We all know that communication is the key to success. Although you may believe what you are saying is being understood as you intended, remember that everyone has a unique perspective according to their experiences, education, and background.

SOLUTION

Integrate calls, feedback loops, and other communication tactics into your project plan to ensure communication is a critical workflow component. If possible, you should also arrange to meet in person to understand one another better and develop more empathy. Also, using project management tools is essential to task delegations and to be in sync with one another.

GOAL MISMATCH

It is crucial in a business that its goals and needs are defined. Goal setting is essential before outsourcing and choosing an outsourcing vendor. To keep your expectations and goal-setting on track, it’s vital to maintain the contract’s consistency, transparency, and sincerity.

SOLUTION

The most effective strategy to define a proper goal for your outsourcing process and prevent goal mismatch is through appropriate communication. Always confirm your project outsourcing requirements, then communicate those requirements to your vendor to keep the two businesses on the same page.

LANGUAGE & CULTURAL DIFFERENCES

The most frequent challenges of outsourcing that most businesses encounter when considering are cultural and language differences. Companies that face linguistic and cultural hurdles struggle to innovate and pay attention to detail on outsourced projects. Cultural and language disparities can result from a lack of knowledge and communication, significantly impacting the outsourcing process.

SOLUTION

Only when there is open communication between the two businesses can a discrepancy in the corporate world be resolved. To ensure proper communication, ask if the staff at the company speaks English or any other preferred language.

CHOOSING A TRUSTWORTHY VENDOR

Businesses that effectively expand into international markets typically have a trustworthy outsourcing partner, which is crucial. It might be time-consuming to select the ideal partner for your outsourcing needs. Since they do not conduct a thorough background check on the contractors, it is one of the leading outsourcing issues many businesses encounter. It can result in the project you outsourced being of low quality.

SOLUTION

When choosing the best vendor, there are a few things to keep in mind, like the firm’s experience, the number of projects and clients it has worked with, the typical project size, the company’s ranking and reviews, its access to the most recent technology, and so on. The list differs from one company to the next, though. Before choosing your outsourcing partner, prepare your questions and get clarification.

MISMANAGEMENT

Every business must get past this stage because their internal personnel handled the previous duty. The vendor’s location and communication capabilities will determine how much control you have over the outsourced job. Since they won’t be informed of your most recent requirements, poorly managed service providers may reduce the quality of your project’s delivery.

SOLUTION

Before choosing an outsourcing partner for your business, you should thoroughly examine the tracking strategy used throughout the process and the company’s experience with clients. In addition, designate the point of contact, track key performance indicators (KPIs) and other indicators, and create meeting timelines.

TIME ZONE DIFFERENCE

One of the main issues with outsourcing many businesses has when choosing to outsource to other countries is time zone discrepancies. There will be a time zone difference when your outsourcing partner is in another country. You can contact someone who can communicate conveniently even though your vendor doesn’t work around the clock. A precise time zone visual aid makes selecting the ideal outsourced partner easier.

SOLUTION

You can minimize time zone discrepancies by communicating regularly with your outsourcing vendor. Establish a time that works for both parties to share updates on the project so that everyone is aware of its status. Alternatively, you can choose a vendor who is open 24/7 so that you can communicate more effectively, and time zone variations won’t affect you as much.

CHOOSING THE APPROPRIATE OUTSOURCING STRATEGY

Choosing the proper strategy for outsourcing your project to a third-party vendor is crucial to get the desired outcome and cut costs. Your outsourcing strategy dramatically impacts how well the project turns out.

SOLUTION

Your outsourcing model should be designed based on the scope, nature, goals, needs, budget, duration, etc. The three most common outsourcing types are time and materials, dedicated development teams, and fixed-price agreements. 

POOR COST ESTIMATION

Outsourcing’s primary goal is gaining a competitive edge over maintaining an internal workforce to handle non-core company tasks. Always weigh your internal team’s cost estimate against the vendor’s price quote before selecting a provider. There are frequently unforeseen costs that weren’t initially considered. These things can add up to a budget overrun on the road.

SOLUTION

When closing the agreement, the only way to reduce outsourcing costs is to ask the vendor for a precise cost estimate. For the vendor to offer you an accurate cost estimate for the outsourcing process, you must adequately outline the criteria for the outsourced project.

SECURITY & PRIVACY ISSUES

During the outsourcing process, you may expose some or all of your company’s assets to your outsourcing partner. The security procedures, data protection policies, privacy concerns, and intellectual property issues involving trade secrets, patents, and copyrights must all be examined for this reason. You should always choose organizations that adhere to strict security protocols because there is always a chance that the vendor may disclose your essential information.

SOLUTION

Making a contract with a non-disclosure agreement (NDA) and service level agreement and checking the company’s security procedures and data protection system are the only ways to mitigate these outsourcing issues.

LEGAL & CONTRACTUAL PROCEDURES

The legal outsourcing process is less uniform than the internal hiring procedure and heavily depends on the vendor’s location. Depending on the country, you can be asked to sign several supplementary documents not required by local law. The outsourcing problems start after the contracts have been signed and the work has begun; little mistakes in the agreement could have disastrous results that taint your relationship with your vendor.

SOLUTION

Ensure an NDA and any other required legal paperwork are ready for the outsourcing business to sign. Talk about every aspect of the process, including what will happen if your provider is incompetent or makes a mistake, and don’t forget to address security concerns. Your contract should include provisions addressing pay, working circumstances, the obligations of the freelancer, ownership details, and other pertinent issues.

IMPORTANCE OF OUTSOURCING: WHY SHOULD A BUSINESS OUTSOURCE?

As a business owner, you would opt for an organization with a solid track record to handle some business operations quickly. It has many advantages, many of which are designed to boost profitability. We hope to persuade you that outsourcing is more of a business necessity than an optimization plan for your firm by outlining the advantages and impact of outsourcing on business. 

BOOST YOUR BUSINESS 

It’s a great way to guarantee that your business maintains steady growth while keeping the core of your team focused on internal tasks because outsourcing the work is more affordable than building your in-house team and because you can cancel an outsourcing contract without laying off employees.

INCREASED PRODUCTIVITY

The impact of outsourcing on employees is increased efficiency and productivity. By drawing in highly qualified and talented people willing to work fewer desirable shifts, outsourcing can boost the productivity of business operations.

RETAIN FLEXIBILITY 

A seasoned outsourcing firm can always scale your outsourcing needs.

ACCESS TO BROADER TALENT POOL

Outsourcing companies can attract top talent to guarantee client satisfaction and successful results. 

MAINTAIN FOCUS ON CORE COMPETENCIES

Investing in an outsourced workforce, whether for software outsourcing or marketing outsourcing, dramatically increases your ability to concentrate on your strengths.

LOWER COSTS

If a task doesn’t require full-time staff, you can save money by outsourcing it. You can keep the employees that are essential to the continuous operations of your business because of the reduced costs.

INCREASED BRAND LOYALTY

Your ability to provide your clients with the care they expect will motivate them to return when you hire skilled individuals to handle project details or develop your products and services.

TOP 5 ASIAN COUNTRIES WHERE YOU CAN OUTSOURCE YOUR BUSINESS

Source: Magellan Solutions 

Through the years, outsourcing in Asia has been continuously prosperous. Countries in Asia are known to be global BPO destinations and can exceptionally provide top-notch outsourcing services. There are various countries in Asia where you can outsource your business. Here are some nations ranking high and advancing in the BPO industry.

INDIA (South Asia)

India continues to be a top outsourcing location for companies around the globe. Compared to North America or Europe, hiring an employee from India is significantly less expensive. Compared to other Asian nations, India has one of the lowest hourly wages.

Even though English is not their primary language, it is of its many official languages. The EF EPI (English Proficiency Index) ranks the nation sixth in Asia for English proficiency. Compared to the rest of the globe, its ability is generally moderate.

India is ranked second in the most populous country in the world, with half of the population being of working age. With millions of students joining the workforce yearly, this gives you access to a broader talent pool.

PHILIPPINES (Southeast Asia)

It is no surprise that Filipinos are fluent in English speaking. According to the EF EPI, the Philippines ranks second in Asia for English proficiency. This is one of the main reasons the Philippines is the world’s BPO capital. As a result, businesses from Western Europe and North America frequently hire Filipinos to handle their customer service. The Philippines is the top choice for many benefits, cost reductions, and excellent client satisfaction.

According to the Philippine Statistics Authority (PSA), the Philippines has a high literacy rate of 91.16 percent, and many Filipinos pursue further education. As a result, you can find suitable candidates for any BPO outsourcing requirement in this incredibly diverse talent pool. 

To guard against cyberattacks, the Philippines has rigorous data privacy laws and rules. One of only three ASEAN nations having data protection laws is the Philippines. The 2012 Philippine Data Privacy Act makes outsourcing safe for offshore businesses.

The impact of outsourcing in the Philippines is extensively recognized as the BPO industry is considered one of the country’s central economic pillars. It has significantly impacted the nation’s economy for several years and is still flourishing even during the COVID-19 pandemic.

CHINA (East Asia)

Numerous foreign investors have entered the Chinese outsourcing market. According to the World Bank: China ranks second globally with the highest Purchasing Power Parity (PPP) at $14.72 trillion.

Regarding digital resonance, China is ranked a strong #7 globally in the 2021 Kearney Global Services Location Index. Due to its high digital resonance score, China is a reliable Asian destination for IT and software outsourcing.

The Chinese government has seen the economic boost outsourcing has provided their economy. They established advantageous tax policies and subsidies to promote growth and create new outsourced jobs.

THAILAND (Southeast Asia)

The nation hopes to transition to a new value-based economy utilizing cutting-edge green and intelligent technologies. As a result, emerging manufacturing businesses will have affordable options and be able to thrive in the modern digital era.

Thailand has been focusing on stepping up its game in the global economy. The nation plans to attract more foreign investments to expand its economic freedom.

VIETNAM (Southeast Asia)

Vietnam has been considered one of the fastest-growing economies in Southeast Asia, even during the COVID-19 pandemic.

With its emerging middle class, Vietnam has a potential market and the ability to draw international investment and emerge as the next outsourcing powerhouse.

According to GlobalData, Vietnam’s literacy rate is 97.75 percent in 2021. For the employees to compete in the IT services industry, the government has also strengthened their technical and digital skills.

CONCLUSION

In the BPO industry, outsourcing is an undeniably beneficial and economical business strategy that offers worldwide access to qualified individuals. The impact of outsourcing on business will be significant if you rely on a competent outsourcing company with a great reference and track record. 

It is a must to take note of the risks you can encounter while outsourcing. And how to solve them because it is useless if you outsource unwisely. No perfect plan exists, but you can achieve your business goals if you play and work harder.

Magellan Solutions Can Provide the Suitable Outsourcing Services Customed for Your Business

Now’s the best time to partner with a great outsourcing service provider and impact your business.

Magellan Solutions provides the best outsourcing needs and solutions for your business goals.

With more than a decade of expertise in the field, we take great pride in offering only the best call center services appropriate for small and medium-sized businesses. On top of that, we are an ISO-certified and HIPAA-compliant outsourcing company. We provide a great variety of top-notch outsourced business solutions. 

Give us a call, and let’s discuss your business needs, and we will assist you every step of the way.

TALK TO US!

Contact us today for more information.