Any business can outsource services and get good results while paying less. But these can only turn out successful through careful planning and execution. This is something that can’t be done one time and needs constant sustainment on change. Failure to meet these requirements can lead to disastrous results that can cost you more in the end.
When companies outsources services, they are highly-exposed to risks and trade-offs. It is important that companies know how to carefully handle the transition to outsourcing firms. Success may not come quickly, but by identifying the problems beforehand, companies can better prepare the solutions and reduce bad impact to their businesses.
Outsource Services: Change Management
Outsourcing can pose many management issues inside the company. This mainly comes from existing employees who find their future in the company as uncertain. The behaviour can be seen through active or passive resistance. Employees tend to find it hard to adapt to new processes and many are left wondering about their roles in the company.
As soon as the outsourcing contract has been signed, the company should implement an effective change management strategy to communicate their intentions. This should answer the ongoing questions of employees regarding the change and satisfy their individual needs. The change management strategy should include aspects in adapting, controlling, and enforcing change. Everything should be defined and outlined, including the procedures and technologies to handle the changes.
Outsource Services: Culture Clash
Cultural differences are unavoidable, especially if a company outsources offshore. This is something that shouldn’t be taken for granted. Difficulties may arise in terms of differing corporate culture and national/ regional culture.
Different companies have different company cultures that employees should adapt. These may come in different norms in terms of speed, style, decision-making, and structure. A company and its outsourcing provider might not come into terms on some issues that may create tension between the two parties.
National/ regional culture clash happens typically when a company outsource services offshore. Although most offshore outsource services speak the same language as the client, they could have a hard time understanding the subtleties of the client’s verbal, non-verbal, and written communications (especially by phone or e-mail).
Companies must hold a training program for their employees regarding the context of the culture of service providers. They will be aware of the outsourcing firm’s norms and customs and understand why service providers act in a particular way. Oftentimes, outsourcing firms take the initiative to train their staff about their clients’ culture, focusing more on their corporate practices and everyday way of living.
Outsource Services: Safeguarding Intellectual Property
Companies should be aware that outsourcing internal tasks may mean giving up the majority of control over their intellectual property. This includes business plans, financial records, business processes, passwords, and other sensitive proprietary files. Confidential information can be easily stolen or hacked by a displeased staff.
The challenge to reduce such risk is to develop protocols that can protect your intellectual property when outsourcing. This means access to information should have limitations and or authorisation from the administration. Policies and procedures for operations must be followed at all times and the use of security controls must be clear.
Recognising these issues in advance can help businesses and service providers achieve success. Through awareness, attention, and focus, they can effectively prepare strategies and training programs to make the transition smooth sailing. To sustain such positive transition, both parties should be committed and consistent to make a big impact.