Hearing a lot of success stories from businesses that have outsourced some of their activities to nearshore and offshore teams? We bet you do. From cost reduction, increased productivity, improved flexibility, and scalability, to growth and profit – businesses of all sizes and from around the globe are preaching about the amazing things outsourcing brought to them.
According to the most recent report on Clutch, about 80% of small businesses have decided to invest in their near future in this fruitful business model. And why wouldn’t they – it seems like all it does is bring the good and help overcome ongoing challenges.
Well, not really. Those who have tried their luck with outsourcing know just how many new challenges occur and how difficult it can be to master the art of collaborating with a remote IT team.
So before you rush to hop on this train, we suggest you first familiarize yourself with this topic by reading a guide on software development outsourcing. And once you have done that you can learn about the pros and cons that come with each. Hopefully, by the end, you will get a rough idea of whether it really would be a smart business move.
THE GOOD
Increase in profit
Originally, a lowered cost of work was one of the primary attractions attributed to outsourcing, which is why it is so often the very first item on the list of pros. This business model allows you to hire teams from remote locations where the cost of labor is lower but the quality of services remains at a satisfactory level. As a result, you get the same (or even better) team of experts who will complete their work up to your standards and, in the end, cost you far less than a local team would.
Greater hiring opportunities
By expanding your search for new team members to a global scale, you improve your chances of meeting talented experts who are just the right fit for your business. This approach allows you to look for candidates who tick off literally all points on your list of criteria.
Forget about settling – continue your search until you get to meet the person who has the necessary skills and experience, and who fits within your company culture.
Access to remote markets
By setting up remote offices across the globe, you actually build a foundation for potential expansion to that market. Think of your outsourced team as your first point of contact with local clients and customers. And not just that – think of them as a team of people who will help you get to know the target market in terms of demands, needs, and best ways to appeal to local clients.
Higher productivity levels
Outsourcing is a tactic many businesses resort to when they wish to minimize the grunt work and relieve their in-house teams of wasting their time on repetitive tasks. Delegating them to a competent, remote team means your local personnel gets to focus on more important work. Furthermore, you are likely to see a spike in performance levels simply due to an increase in your in-house employees’ satisfaction.
24/7 availability
A remote team that works in a different time zone enables you to remain available to your customers at all times. For this reason, the majority of businesses decide to relocate, for instance, their customer support, so that there would always be an on-call person ready to answer any urgent matters.
THE BAD
Lack of transparency
Outsourcing a part of the business means having to trust that the remote team is performing its part of the deal as promised. Unfortunately, in some situations, it is near-impossible to oversee every step of the process they take which can, in turn, leave you with less than satisfactory outcomes. That is why choosing a reliable outsourcing partner cannot be stressed enough.
Misunderstandings
Depending on the country you decide to outsource to, you are running the risk of creating a huge cultural and language gap between your in-house and remote teams. And if you think a translator will help you overcome the hurdles – you’re wrong. The cultural impact of one’s understanding of the task/project at hand, combined with their unique approach to an issue can cause misunderstandings and, ultimately, bad results.
Loss of control
The further you travel, the less you’ll feel in control of your team. In-person meetings will either be rare or eliminated since you will not be sitting at the next table or in the next room. To manage a remote team, you will need to employ practical video conferencing and project management tools which will allow you to communicate more clearly and gain insight into each person’s progress.
27/7 availability
Yes, you read that right but this time, we mean that you need to be available 24/7. Because of all the above-listed cons of outsourcing, you will likely find yourself in a situation where you’ll have to oversee your people at all times. Additionally, making yourself available around the clock will be the only way to solve urgent problems and respond to questions that need immediate answers.
Security risks
Outsourcing puts you in a position where you need to share sensitive data and thus fear potential breaches. Unfortunately, mishaps happened to others in the past, which is why we are seeing the rise in new cloud and other technologies which will allow us to make all data available to all employees without having to worry about unauthorized 3rd party access.
The pros are there to convince you of investing a part of your resources into testing the outsourcing model; the purpose of the cons is to warn you of hidden “costs” which, if not calculated properly, can prevent further growth of your business or worse – burn it to the ground.
The only question you need to ask yourself now is – are you equipped to cope?
Mike is an Australian business consulting specialist. He’s working with companies that outsource their IT maintenance. He often writes about technology, business, and marketing and is a regular contributor on several sites.
