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Outsourcing Mistakes: 4 Errors Companies Make

There's still no script for the great American IT outsourcing project. But today's most common outsourcing pitfalls have less to do with technology and everything to do with relationships and communication. Or lack thereof.

“Both companies have to rise to the occasion to make it work,” says Romi Mahajan, president of the KKM Group, a marketing consulting firm, which outsources some of its IT operations.

Nevertheless, communication breakdowns and finger pointing frequently derail even the best-laid outsourcing plans. Here are four missteps to avoid.

For the full story, see EBN sister site InformationWeek.

— Shane O'Neill is the managing editor of InformationWeek.

11 comments on “Outsourcing Mistakes: 4 Errors Companies Make

  1. Himanshugupta
    August 28, 2014

    I believe that apart from communication the major hurdle with outsourcing to other countries is the work culture and social fabric difference. The cultural difference makes effective communication more difficult. One of the way to avoid mis-communication is to have frequent interaction (possibly face-to-face) with the team members.

  2. Nemos
    August 28, 2014

    : You think you can outsource your whole brain:


    That it sounds quite cool , by the way a nice article, I have to agree that the communication part is the most critical (as always in every relation) and in outsourcing one can say that is a key word.

  3. Eldredge
    August 28, 2014

    Business goals can be moving targets, and if companies don't keep explaining those goals throughout the process, the relationship will sour fast.


    Communication plays a large role in aligning business goals. Ultimately, this is always the responsibilty of the senior partner in the busines relationship.

  4. ITempire
    August 31, 2014

    Shane, agreed that most outsourcing assignments' failure is about lack of communication or weak relationship management. The role of coordinator (usually the client's staff) is critical here. If that person knows how to make things work, projects can go effectively unless either party is hopeless.

  5. Taimoor Zubar
    August 31, 2014

    “One of the way to avoid mis-communication is to have frequent interaction (possibly face-to-face) with the team members.”

    @Himanshugupta: Having worked in an outsourcing environment, I think that's really a good solution. Even after working with off-shore team members for quite some time, the distance prevailed and couldn't be covered up. Once the company started a policy where members were able to fly to and fro and meet each other, the interaction greatly increased and overall the quality of the output rose as well.

  6. ITempire
    August 31, 2014

    Himanshugupta, yes that is great and in a project involving significant financials, travelling costs is affordable. Nothing is as effective as face to face communication. In a cross-border outsourcing, terms and conditions must be thoroughly drafted taking into account many things including local laws affecting outsourcing contracts.

  7. ITempire
    August 31, 2014

    TaimoorZ, I second your comment. It is just that some members of senior management will always have an argument “Why do you need to travel when we have skype/lync/webex ?”. Some will strongly support that face-to-face is more effective than online communication.

  8. Himanshugupta
    August 31, 2014

    @Waqas, you are right that local laws play a significant role in shaping the company policy related to outsourcing. Which interm decides how successful or unsuccessful the whole operation becomes. 

  9. ahdand
    August 31, 2014

    @himanshugupta: Yes as long as its being put into practice. If not then there is no point at all. 

  10. ahdand
    August 31, 2014

    @waqas: Yes the senior management should also listen to the lower level as well and also consider some of their ideas too. 

  11. Houngbo_Hospice
    August 31, 2014

    @nimantha.d,

    That is an ideal way to make every employee feel important in the company. The senior management should also give credit when ever the idea of a subordinate is used.

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