How to Get Through the Outsourcing Maze: A Guide for CIOs and CTOs.
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In this highly competitive world we live in, U.S. companies that want to cut costs while staying ahead of the competition are turning more and more to outsourcing. There are many good things about outsourcing tech work, such as getting access to skilled talent, being able to quickly scale, and saving money. But things aren’t always going well. There can be a lot of problems along the way with outsourcing that could make it harder to reach your strategic goals if they are not properly handled.
As Chief Information Officers (CIOs) and Chief Technology Officers (CTOs), the choices you make about outsourcing can have a big effect on the success of your company. Based on facts, this blog will talk about the biggest problems U.S. companies face when they outsource and give you tips on how to solve them. We should go on this journey together.
Tech Outsourcing Most Common Challenges.
1. Language barriers that make it hard to communicate.
Communication that works well is the key to making outsourcing relationships work. Differences in language and culture can cause confusion, which could ruin projects. Common Sense Advisory performed a study that showed 56.2% of customers value product information in their own language. This shows how important it is to communicate clearly.
Quick advice: Choose partners from countries that have comprehensive English teaching programs, ideally in those with cultural similarities. Here are the top three countries with the highest English skills in Latin America:
- Argentina
- Costa Rica
- Honduras
2. Quality Control: Making Sure the Standards Are Met.Â
Keeping the standard of work that is outsourced high is always a challenge.Â
Statista did a study and found that 62% of companies say that one of the hardest things about outsourcing is keeping quality standards.
Quick Advice:Â Strong Quality Assurance (QA) methods should be used both internally and with your outsourcing partner to make sure that the quality is always the same.
3. How to Beat the Clock When There Are Time Zone Differences.
Getting people in different time zones to work together can cause delays and make it harder for them to work together. Eastern Management Group did research that showed 74% of people think that changes in time zones affect how well a project works.
Quick Advice: Set clear rules for contact, make sure work hours overlap, and look for nearshore or onshore outsourcing partners whose time zones are compatible.
4. Worries about safety: Keeping data safe.
While data protection is very important, many businesses forget about it. According to IBM’s Cost of Data Breach Report, a data breach in the U.S. costs $8.19 million on average.
Quick Advice: Make sure that strict security measures are in place, that data is encrypted, and that all rules and standards in the business are followed.
5. Lack of talent: Not enough skills.
There aren’t enough skilled tech workers around the world, so it can be hard to find the right people for your projects. CompTIA did a study that showed 55% of companies have trouble finding and hiring IT professionals.
Quick Advice: Work with outsourcing companies that have access to a large pool of skilled workers and put money into programs that train and improve workers’ skills.
6. Legal and Regulatory Compliance: Finding Your Way Around the Law. Â
It can be hard to figure out the rules and laws that apply in different areas. The Ease of Doing Business Index from the World Bank shows that governmental problems are very different from one country to the next.
Quick Advice: Find lawyers and business partners who know a lot about foreign compliance, and make sure that contracts make it clear who is responsible for what.
7. Cultural Misalignment: Bringing Different Work Cultures Together.Â
Culture and moral differences at work may make it harder for people to work together. Hofstede’s Cultural Dimensions theory stresses how important it is to understand the subtleties of different cultures.
Quick Advice: Encourage training that helps people from different cultures get along and build relationships based on respect and understanding.
8. Problems with transition: the disruption factor.
When work is given to an outsourcing partner, the process can be disturbing. According to research by Deloitte, 70% of outsourcing relationships don’t work out the way they were supposed to.
Quick Advice: Make a thorough plan for the transition, spell out everyone’s roles and responsibilities, and make sure everyone knows what to expect.
9. Secret Fees: Costs That Break the Bank.
During outsourcing projects, costs can come up out of the blue. Gartner says that 35% of companies went over their limits for outsourcing.
Quick Advice: Before signing contracts, do a full cost analysis that includes any secret fees and possible changes to the project’s scope.
10. No one is responsible for meeting deadlines.
It can be hard to make sure that outsourcing partners meet deadlines and reach project goals. Pulse of the Profession did a study that showed that only 64% of projects reach their goals.
Quick Advice: Make sure you have good project management practices, set clear Key Performance Indicators (KPIs), and keep the lines of communication open.
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