Offshore Outsourcing Risk— Keeping It Clear and Real

On June 13, 2012, in Outsourcing, by Business Development Group
The exponential growth of outsourcing in today's market has come as a result of its promises on cost savings. However, the success stories represent only about half of the clients who have opted for these services. A few others failed in realizing the promise of offshore outsourcing.

The exponential growth of outsourcing in today's market has come as a result of its promises on cost savings. However, the success stories represent only about half of the clients who have opted for these services. A few others failed in realizing the promise of offshore outsourcing.

The exponential growth of outsourcing in today’s market has come as a result of its promises on cost savings. However, the success stories represent only about half of the clients who have opted for these services. A few others failed in realizing the promise of offshore outsourcing.

The flaw in here is not in the actual outsourcing model; but rather in the lack of proper risk management. Like all other business decisions, the choice to outsource tasks from your project is a risk by itself.

According to industry and marketing experts, there are three components that involve risks when entering into an outsourcing contract: people, process, and policies. It is therefore wise to look into each component to ensure that your projects are returned as you would have expected and that you can maximize value out of the money you spent for such services.

Related Article:  Overcoming the Risks of Outsourcing

One of the most common risks in IT/BPO outsourcing  is in the unreasonable expectations of the client towards the costs of the outsourcing project. Tempted by the possibility to diminish the expenses on software development, some unreasonable clients seek and work with those IT outsourcing companies which offer the lowest cost on the market, completely disregarding the expertise, competence and reputation of those companies.

Preferring economy to quality has never been a good idea, and prospective customers should realize that a quality product would cost a relevant sum of money. Being offered a seemingly high-quality product for a laughable price you normally get suspicious suggesting it might be a fake or a trick, don’t you? The same principle works here, you should expect considerable, however not overwhelming economy, estimated by experts to be around 20% during the first couple of years of collaboration with the chance to grow bigger if you choose to continue working together.

Related Article: Success Factors for Outsourcing: Knowing When and What to Outsource (Part 1)

 

Another example of widespread IT outsourcing risks lies in the eventuality to get a product which will differ considerably from what you ordered – or rather from what you originally envisioned – by forgetting about the project once it’s given to the developers. It often happens that customers describe the project in general terms and leave the rest for the programmers to imagine, which is completely wrong as a tactics. Millennium Rise project managers will constantly enquire you about the details of your project and account on the work done and left in order to get the best idea of what the final result should look like and to keep you informed about the process of the realization of your project. Continuous monitoring, management and testing of your project as well as reasonable expectations of both time and cost are the keys to avoid a number of IT outsourcing risks and to enjoy outsource benefits to the fullest.

Related Article: Top 10 Risks of Offshore Outsourcing

 

 

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