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8 Common Outsourcing Misconceptions with Derek Gallimore

Today, Derek will talk about the eight common misconceptions of outsourcing.

 

Summary

  • 8 Common Misconceptions of Outsourcing
  1. The same outsourcing project can deliver all desired results.
  2. Outsourcing services is like buying a commodity.
  3. You need a strong ironclad contract because you’re in a developing world and everything could go wrong.
  4. You don’t need a contract.
  5. Vendors have a greater liability for failure than in-house employees.
  6. An outsourced process an outsourced process means that it’s not your problem anymore.
  7. Outsourcing internationally harms domestic business and communities.
  8. Your first failure should be your last attempt to outsourcing.

 

Key Points

  • There is no magic bullet when it comes to outsourcing.
  • Outsourced processes, just like any aspect of any business, you have to keep an eye on it especially in the early stages so you can tweak things and check that things have been done well.
  • Derek believes that, inevitably, outsourcing is the way of the future.

 

Resources

  • outsourceaccelerator.com/podcast/episode43
  • https://www.youtube.com/watch?v=wVHpFPcv0ms

 

Transcript

Expand transcript

Hi and welcome to another episode of the Outsource Accelerator Podcast. My name is Derek Gallimore. And today on this episode it’s me. Okay, so I am talking about the eight common misconceptions of outsourcing. This is actually an outsourced snippet and this is a video with an infographic associated with it. And this is available on YouTube and Facebook. So, it’s a little bit of a new format but obviously, it’s still very valuable in audio form. If you want the full format and you wanna see everything happening then go to the show notes. It’s all there. Or go to our Facebook page or our YouTube. But effectively you can find all the links at outsourceaccelerator.com/podcast/episode43.

Derek: Hi my name’s Derek of Outsource Accelerator and this is an outsource snippet. Today, I want to talk to you about eight common outsourcing misconceptions. Okay. And in my years’ experience of outsourcing. There there’s a few common misconceptions and often I find that it’s the business owner themselves all the newbies entering into outsourcing that actually need a little bit of training and familiarization with outsourcing to get the best results from the get-go. So, let’s get straight into it. The first misconception I find is that the same outsourcing project can deliver all desired results. Okay. And very commonly I tell people to think of outsourcing as no different really to getting a job done in your own home town except sitting in a different location. Yet outsourcing very commonly can be perceived as a magic bullet. And you know a small team might be expected to manage a website manage a social media account and customer services and you know product development and it’s very commonly not the case as is the situation back in your home market. So generally specialized projects and keep the project fairly narrow until you build specialties and experience and then can expand from there.

So, number two outsourcing services is like buying a commodity. Now the outsourcing service providers they vary greatly you know in terms of their service provision, the level of assistance they give or the level of sort of hands off just bare bones. So, check out your service providers. They are very different but also you know the, the people themselves because it’s often talked about seats or staff or a process. It can de-humanize it. But effectively you know behind every process obviously is a person. So, bring it back to you know the people are the business so you’ve got to educate them and bring them into the culture and help them with the processes.

So, number three and number four actually number three and four relate to contracts. Number three the misconception is that you need a strong ironclad contract because you’re in a developing world and everything could go wrong. I want to assure you that you know don’t, don’t overdo the contract from the start outsourcing very commonly like business. It evolves and it needs to be quite organic. So, make sure that you’re well protected make sure that your downsides are covered but don’t go for the iron clad contract too heavily. Now the alternative to that is and this is number four is that you know you don’t need a contract and that isn’t the case. You do need a contract because you know if they’re looking after part of your operation part of your business then you need to make sure that it’s reliable and has longevity. But again, it’s, it’s finding that balance.

So, moving on, number five, vendors have a greater liability for failure than in-house employees. Okay. And this is the old argument of is two employees do a better job and increase operational learning, organizational learning or you know do contractors add better value. I would suggest within outsourcing that you know depending on the outsourcing part of that you choose. They can bring a huge amount of operational expertise to your business and that process and the Philippines specifically has been working in the outsourcing space for 20-25 years. So, there’s a huge amount of expertise within the business process outsourcing that can be put into your business. You know that effectively comes with the engagement. So, there can be huge value add there in terms of good BPO relationship.

So, what do we have to number 6. An outsourced process means that it’s not your problem anymore. Okay. This couldn’t be further from the truth. Just like any aspect any operational aspect of your business and you want to keep an eye on it and especially in the early stages you want to tweak things you want to check that things have been done well. You want to check that the results as you expected and you know consider it as a part of your organization still. But there’s just that extra layer of management. And it’s slightly distanced but you know at the end of the day it’s still your organizational process and it needs your attention for best results.

So, number seven this is a hot potato but outsourcing internationally harms domestic business and communities. Now I wholeheartedly disagree with this. I think that outsourcing inevitably is the way of the future. And there are higher cost efficiencies by outsourcing. I believe it’s a win-win for everyone involved. It’s a win for the business that is outsourcing because it increases profit margins and opportunities. It’s a win for the community of that business because the business is enabled to thrive. Okay. It’s then able to invest more into business into the processes and growth. You know that is that is capitalism but that benefits the community through profits and through taxes and things like that. And of course, it benefits the outsourcing destination such as the Philippines. Okay. So, it really is a win-win. I write for a lot about this on the website. If you want to go check on some of the blogs.

And then number eight your first failure should be your last attempt to outsourcing. Okay. This is sort of a very common mistake. And you know if I use an analogy of a plumber if you go and get a plumber there’s some good ones some bad ones. And if you have a bad experience with a plumber don’t write off all of plumbing. Them. Don’t write off all of plumbing world. It is. It could just be a bad egg you know. And that is the same with outsourcing. You know there’s, there’s obviously a huge range of service providers. There’s a huge range of employees within that structure. And there are good ones and bad ones and also it depends on the process of engagement and whether the projects were well-defined. But I do very commonly see people initially dipping their toe in outsourcing and then wanting to and not having great experience because there’s a learning curve and then being unhappy with the concept of outsourcing generally. So, I encourage you to get the education you need, get the training you need yourself and give it a really go really good go because the results and benefits are fantastic if you can nail it. So, thanks for listening. We have actually got a podcast on this so podcast episode 25 if you wanna hear more of an in-depth discussion and I look forward to seeing you again soon. Thanks.

Okay. Please let me know what you thought of that. That’s a new format. And as I mentioned the full video version is available on our YouTube channel. And also, Facebook. But if you want to find it easily go to our show notes that is at outsourceaccelerator.com/podcast/episode43. And as always if you want to ask me or outsource accelerate anything about outsourcing then e-mail us at ask@outsourceaccelerator.com.

 


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