The Future of Outsourcing and Tips For New Outsourcing Industries

The world of information technology has been utilizing outsourced and offshore resources for years now and the market has become much more mature.

Now, other industries are dipping their toe into the waters of outsourcing work, and there are many things you can learn from experienced IT managers who have discovered the best ways to outsource work. The future will hold new industries and new countries becoming involved in outsourced work.

Here are a few industries that can and are benefiting from remote teams:

  • Translation
  • Accounting
  • Human Resources
  • Marketing
  • Auditing
  • Help Desk
  • Engineering
  • Backup and Security
  • Consulting
  • Drafting
  • Architecture
  • Legal
  • Back Office Tasks
  • Transcription
  • Medical (including medical tourism)

There are many industries that could benefit from outsourcing repetitive tasks.

[note class=”info”]IT managers involved in managing outsourced teams have discovered that you can have successful offshore projects, but there are aspects of working with outsourced teams that aren’t for the faint of heart. [/note]

Here are some things I’ve learned from working with remote teams of designers and developers. These principles are important whether you are working with technology vendors or with other industries.

1. Not all outsourced teams are equal.

Sure, it’s tempting to consider outsourced work a commodity, but it isn’t. Good developers and designers still work faster and better than average developers and designers. The same is true for other professionals. Errors cost money and lose clients.

2. Finding good teams is more difficult than it sounds.

Having great teams makes all the difference in the world. If you don’t know who the good teams are, find someone who does. It can be even more difficult when you deal with larger organizations because you may not know exactly who will be actually doing the work. And make sure the company is a great partner that you can trust.

3. You need someone who knows how to manage outsourced teams.

Managing any large project can be a challenge, managing one half way across the world requires a different approach. I’ve seen many managers learn this the hard way. I manage outsourced projects a bit differently than I manage local teams because it’s a different type of situation.

4. A cheap hourly rate doesn’t always means the overall project will be less expensive.

If it takes longer to produce the software or do the other outsourced work, it may end up costing you more overall, and you also lose from opportunity costs. You also may end up paying more to support the work after it is delivered.

5. Quality should always be a key consideration.

Poorly developed software can cause lots of headaches down the road no matter who develops it. The same is true for other types of outsourced work. Make sure you analyze prior work from your vendor to make sure that you will be getting a quality product. It is expensive to change vendors to finish a project or support a poorly implemented one.

6. Pay attention to the language skills of the vendor.

Miscommunication is a common reason for failed outsourced projects. Make sure the key members of the vendor team can understand what you want them to do.

7. Time zones matter.

Sometimes it is good to have people working while your local team is sleeping. Having a team in a similar time zone can be nice too when you want to address an issue immediately. Just make sure you understand how the time zone affects the project. I personally like working with Latin American teams because real time communication is a key for me.

8. Consider the types of work that you send offshore.

You should think through the types of work that you prepare to send to offshore teams. Consider if the work is too core to your business, too complex, or too sensitive to send to an outsourced team. In some industries, you also have to consider whether it is legal to send the work overseas. An example is having a offshore team work on a database that stores private health information.

9. Make sure you understand the cultural differences.

Language is one thing, culture is something else entirely. There are differences in customs but also differences in employee law in different countries. This means different holidays but differences in how employees are compensated. This may not affect you if you are doing pure outsourcing but if you are considering building your own team in another country, you should make sure you understand employment law in that country. There are big differences that can become a big “gotcha” down the road.

10. Consider your proprietary systems and information and who has access to it.

Your vendor may be working directly with your competition. Consider what they will know about your company. The vendor may also be able to use your processes to compete directly with you at some point. International law is different in this regard and hard to enforce. Take this into consideration.

[note class=”info”]Start with a smaller, non-core project to test the waters. This way you can start to build your teams and relationships without putting your company at risk. It takes time to build up a solid working relationship and trust in a vendor.[/note]

As other industries explore the world of offshore possibilities, learn from groups like IT that have been doing it from years. Learning from the past can save you from some of the disasters I’ve seen in the IT world. It can be very rewarding to work with people in different countries but you should also be aware of the downsides and plan accordingly.