How satisfying it is to receive support from an expert in your task! Contracting out a professional or a company for support in non-core areas is outsourcing. This concept has revolutionized global businesses and encouraged digitalization. Typically, it is widely accepted as a cost-effective and supportive practice, especially in the IT-dominating corporate world. Considering the IT infrastructure, compromising quality is unacceptable.
Despite its multiple benefits, certain points are vital to consider seriously. These aspects are the pitfalls that downgrade outsourcing. Let’s check out what they are below.
Common Quality Pitfalls that Fail IT Outsourcing
IT outsourcing is a strategic approach valued for optimizing overall cost and resources. With third-party support, accessing specialized skills will be effortless. And the focus on core competencies will enhance. But a slight compromise with quality can bring drastic results. Here are some common drawbacks that can fail IT outsourcing.
1. Gap in Communication
Communication needs to be ongoing for seamless IT outsourcing services. Possibly, the time zones and cultures may differ. Besides, language can be a big barrier. These all gaps can be removed through communication because:
- Lack of Clarity in Requirements: Unclear specifications may lead to target mismatch or misaligned expectations. Frequent communication can help in meeting expectations. A study by Deloitte (2023) reveals that 47% of businesses report that miscommunication leads to delayed deliveries in outsourcing.
- Delayed Feedback: If there is a communication gap, the feedback will be delayed. It increases the project timelines. Clear documentation, discussion, and overlapping working hours can help in averting this kind of delay.
2. Lack of Technical Expertise
Outsourcing companies providing managed IT services employ technically proficient engineers. But this claim may be conflicting between the stated reality and actual capabilities. Because of this reason, the project quality was compromised.
- Skills Gap: The 2022 Global Outsourcing Survey disclosed that 38% of business entities are trapped in challenges because the hired outsourcing teams have inadequate technical expertise. It represents a big skill gap.
- Obsolete Technology: Besides a vacuum in skills, these vendors may rely on obsolete tools or methodologies. This incapacity does not allow beneficiary companies to innovate and get compatible results.
These challenges can be avoided through thorough due diligence while selecting an IT service outsourcer. Simultaneously, assessing their technical compatibility and potential must be discovered beforehand.
3. Quality Assurance Challenges
Hiring an external technology expert may be risky as he may not follow quality standards. This challenge hits when you ignore this research prior.
- Testing Capabilities: The hired external partner for IT solutions sometimes emphasizes deadlines over thorough testing. It ends up in below-par quality services. In this regard, Gartner found that 28% of outsourcing failures occurred because of lacking quality control processes.
- No defined SLAs: The next concern is lacking a clear Service Level Agreement (SLA). With unclear quality standards or protocols, these vendors successfully escape accountability to deliver excellent technology services.
To overcome these situations, a well-defined SLA can help. It must mention how to address quality issues and also the integration of a rigorous testing framework.
4. Cultural and Organisational Misalignment
A bit of cultural shock can break collaboration and team dynamics. This can end up in the failure of the project.
- Work Culture Conflicts: Misaligned or disturbed problem-solving approaches, work ethics, and decision-making procedures can hamper workflows.
- Employee Turnover: If employees give up their roles on and off, it results in inconsistent quality. It is simply because a new team member takes longer to adapt to that work culture. This is proven in a study by PwC, which reveals that 29% of companies faced disruptions because of the high frequency of changed team members.
These problems can be addressed through cultural training for both the outsourcer and the beneficiary company. Also, check out the reviews of the vendors if they show a low attrition rate.
5. Cost Overruns and Hidden Costs
This is not concerned with quality, but the cost. However, maximizing savings is the foremost goal of outsourcing. But hidden costs and an overrun budget often fade away the shine of its benefits.
- Unforeseen Expenses: Sometimes, unseen costs on infrastructure maintenance, travel, and training sum up to the overall budget, which may break the bank.
- Scope Creep: When the project is poorly designed, it can add more layers to the work. It increases the overall cost of the project.
The wrong overview projection not only adds more tasks to the to-do list but also increases its overall budget. This problem can be resolved by drafting a transparent pricing structure and monitoring the scope of the project if it’s within the budget.
6. Data Security and Privacy Issues
Data is considered extremely sensitive, especially when it resonates with the contact or identity details of customers or stakeholders. This kind of data is considered extremely sensitive. Cyber spies look for these details, which causes breaches.
- Data Breaches: Outsourcing accounts for nearly 27% of data breaches worldwide, according to the 2023 Cybersecurity Outlook. This is an alarming sign.
- Non-Compliance with Regulations: Compliance policies and laws are renewed, and familiarity is key to avoiding penalties. Many times, companies forget to comply with it.
One can easily sail across these problems by embracing data-sharing protocols, conducting regular security audits, and hiring ISO-certified vendors.
7. Inadequate Project Management
The handling of a project is also important, especially to achieve desirable results.
- Unrealistic Timelines: Poor management often leads to missed deadlines, and when it’s time for deliveries, this inappropriate practice results in low-quality work.
- Lack of Coordination: Lack of coordination between in-house and outsourced IT support teams can hamper the project profusely. PMI research has proven it, which reveals that 37% of outsourcing projects flop because of poor or bad project management practices.
These two shortcomings can be reversed by deploying experienced project managers. For better collaboration, sharing tools can be used.
8. Loss of Control Over Processes
Working with an external IT support partner means you have to share critical IT functions with it. Businesses may lose control over it. As a result, the project moves in the wrong direction.
- Vendor Dependency: Relying on your technical support partner is fine. When it exceeds a limited control, the chances of vulnerability increase.
- Lack of Transparency: Being a third party, the outsourcing company may not be able to provide detailed insights into the project, which leaves clients in the dark.
To sort out these problems, drafting regular reporting protocols is a must.
Conclusion
IT outsourcing is highly recommended, but sometimes this recommendation may not be worth it. It is not exempt from challenges. Commonly, businesses face challenges in selecting the right outsourcing partner. Establishing a robust framework and collaboration adds more intensity to these challenges. To get rid of them, businesses must properly plan, do research, go through the feedback of the selected outsourcer, and draft rules in the SLA clearly for high-quality solutions.
